hah!

Nope. Sold the house so I *could* build. For the sake of a few months in an apartment, I'm disqualified.

This is probably the dumbest tax credit ever. It only churns the market, it doesn't encourage any net gain on reducing inventory. Worse yet, I know who pays for all that free money.

Nicole, from the IRS web site regarding the $6500 credit:

They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.

Maybe you do qualify.

BTW, the tax code says that when the taxpayer contracts to have a house built on land owned by the taxpayer, the "purchase" date is the day you occupy the home.

Nope but I sure am hoping that it makes me about $400,000 richer! Praying hard that this is the break we need to sale our house so that we can build.

Oh man, we sold our house Feb 28th 2007. We lived in it for 7 years. Does that mean we have to be able to move into this new house by Feb 28th 2010? It isn't due to be done until April! I didn't hear about the 5 years in 8 part!

I think it does. Accurate information on this stuff is a bit hard to come by. I got tired of reading garabage on the "news" sites, so I used Google's gov search feature and turned up an IRS posting on the new law. The quoted bit above is copied directly from that site.

Unfortunately, I didn't bookmark it.

On the other hand, I remember reading something that said a first time home buyer is defined as one who hasn't owned a house in three years, or something like that. You might want to check on this, and I could be wrong.

I was excited to see this post and went looking for a little more info. Here is a helpful web page from the NAHB. #12 refers to new home construction.

Here is a link that might be useful: NAHB FAQ

Creek_side... It's been opened up to people that have owned homes previously.

I'm building, but it's also my first home, so I'm getting the 8k. Prior home owners get 6500.

Do I qualify if my home is going to be "like new" when we're done remodeling? -tripling the size of the house-. We have a construction loan which will swallow up the existing mortgage. Probably not - we're always a day late and $200,000 short. ;) These NJ property taxes are crazy. It's highway robbery.

Lori

I'm in the same situation as Nicole. We were in the same home for 10 years and sold it last March. We have been renting and our home will be finished before April. I hope will are not out of the time period for the $6,500.

You should be all right. You meet the five of the last eight requirement. I believe you have until June to move in as long as the contract is signed on or before the April date.

The contract signing as the cutoff date only works if you are buying the land AND the house from the developer. If you own the land, it's the move-in date.

I won't be moving in my April, I can say that for sure.

You don't have to move in until June 30, if you have a signed contract in April.

Hmmmm, we sold our old house and moved into the new one in 2007. But the new one is still under construction (tax assessor has 90% finished). Wonder if we can claim the credit when we finish it?

Hmmmm, we sold our old house and moved into the new one in 2007. But the new one is still under construction (tax assessor has 90% finished). Wonder if we can claim the credit when we finish it?

It doesn't sound like you can.

From the IRS: Q. Which home purchases qualify for the first-time homebuyer credit?

A. Any home purchased as the taxpayerÂs principal residence and located in the United States qualifies. You must buy the home after April 8, 2008, and before May. 1, 2010 (with closing to take place before July 1), to qualify for the credit. For a home that you construct, the purchase date is considered to be the first date you occupy the home.

Here is a link that might be useful: IRS Page On The Tax Credit

Here's a question I have not seen addressed in any of the write-ups on the tax credit. If you buy land from one party and then construct a house on it using another party, is the cost of the land added to the cost of the house? If so, are there time limits between the two purchases?

creekside, I did read where it said that if you construct a home on your own land then the 'settlement date' is the day you first occupy the home, it did not talk about any time limits between purchasing and construction.
Thanks for posting this thread, by all I have read we qualify for the credit and I did not think we would-of course as we approach the end of construction an extra $6500 would be great.

The things I learn on this forum. This is great news for us, I think, but I am still a little confused about the timing of the credit as it relates to new construction. If the settlement date is the date you first occupy the home doesn't that mean you have to be in by May 1? How can you move in June and still get the credit?

This is a critical piece of information for us because we have been shooting for a mid summer move even though our builder said a couple of weeks ago he could have us in by April if we broke ground now. We haven't been in any hurry but this could make us rethink our time line.

Sidney, if you are having a house built for you on land you already own, the critical date is the date you occupy the home, not the settlement date. It can be as late as the end of June, if a binding contract was in place by the end of April, otherwise you must be in by the last day of April.

That's how I read the advice from the NAHB and IRS sites.

I just realized the above statement seems like an absurdity, but then I am quoting the government.

It would probably be better said that you have to be in by the end of April, or end of June as long as the contract was in place by the end of April.

Thanks, Creek_side, This is helpful.

OK my next question is going to sound stupid to all of you who have experience with home building but I've never done this before. What has to happen before the binding contract is in place. Is that the equivalent of closing on an existing home where the house is 100% ready to move in and the keys are handed to the buyer. If you have to own the completed home by April aren't you occupying the home with the first box moved into the house.Is there some other definition for "being in"?

Thanks in advance for your patience everyone. I'm already adding back features to my wish list. I would love to take advantage of this tax credit if at all possible.

As far as I know, you just have to have a signed contract with the builder. You will need a set of plans, which the contract will reference. As a practical manner, you will need financing if you aren't paying cash. The lender will probably require a signed contract with the builder before closing the loan.

Typically, your contract with the builder will have a financing contingency. If you can't get a loan, the contract becomes null and void. Since we are discussing how the IRS might interpret things, it's possible they might not consider the contract with the builder binding until you have closed on your construction loan.

Since a lot of people may jump into this, I think time is of the essence. Banks have been notoriously slow to process loans, so consider consumer friendly alternative lending sources such as credit unions and farm credit bureaus.

I would say that your move in date would be verified by the date on the Certificate of Occupancy. That also means that your fate would be in the hands of your local government. To get a CO the house doesn't have to be completely finished, just certain things to make it livable like running water, a working kitchen, etc. I have a friend who finished off a basement apartment to live in while doing the upstairs. She recently got her CO for the upstairs even though there's still a lot to be done. I'm pretty sure none of the painting or floors are done.

A CO doesn't count. You can have a CO and not be moved in. You have to occupy the house, which is basically your word that you moved. If you are ever audited, though, the CO would be invaluable. Other proof would be changing your mailing address, utility records, etc.

The updated IRS form for claiming the repeat buyers tax credit has not been released. The first time buyers form is available.

Hmmm, I am not sure if we will qualify, what does everyone else think?

We bought our exhisting lot in July 2004 and moved into newly built home in December 2004. We then sold the home in September of 2009 but won't move out until December 2009 (5 years after moving in) when our new home is ready.

It sounds like we will either not qualify for being a few months shy of owning the home for 5 years or qualify based on the loose wording bc the home will have been our primary residence for 5 years...I suppose I will leave it up to our accountant to figure out but I am really curious now bc $6500 would be wonderful!

The criteria seems to be owned and occupied. Did title transfer in September? That would do you in according to my reading of rules.

Does owning a home five out the last eight years have to be the same home? We're building. We will probably move into the new build in January. We're temporarily living in an apartment. We sold our old house back in September. We lived there for three years. We owned and lived in the house before it for four years. We have been home owners for seven of the last eight years.

I would think that you would qualify. I expect that is one of the points that the IRS will have to address. There will probably be quite a few people in your situation.

The sale of our home closed in September so if that is what the IRS goes by we will miss out.

I thought the deal was that a person had to live/own in one home for 5 years (to keep flippers from getting the tax credit) but it is definately worth looking into. We have owned 2 homes for a total of 7 years during the past 8 years, the longest being a few months shy of 5 years which is why I was thinking we might not qualify.

We sold our home in June and have been living in an apartment in our new location while we learn the area and house-hunt. We haven't found any existing homes we like, so we just made the decision to build. We've talked to a builder and are revising floor plans right now. If we hurry and the weather cooperates, we *might* could get in by end of April, but that would be pushing it. The builder will carry the construction loan, with us paying 10% down to get him started. When the house is finished, we'll then "buy" it from him and start the mortgage. Under this scenario, can we still sign a contract in April for a house that isn't yet finished? Is our 10% down considered a "contract"? Thanks!
Tracey

Tracey, as I read it, if you own the land the house will be built on, you must have a binding contract to build in place by the end of April, and you must occupy the house by the end of June.

But if you don't already own the land, but are buying the house and land as a package, you must both close and occupy by the end of April.

A down payment isn't a binding contract, but it may be part of one. You certainly aren't going to give someone 10% of the price of a house without a written contract, I hope.

To emphasize, the extension does not come into play unless the house is being built on your already owned land, in which case a binding contract is required by the end of April, instead of a closing.

And please understand, this is my interpretation of what I have read on the subject. I am not an attorney or tax guru.

Hoosiermom, there seems to be no specific guidance on whether the five year requirement can be made up of multiple homes in an eight year period or not. I can only guess that it will allow it.

yeah, right. My husband lived in his condo for four years before he sold it and we are renting mine (I have only had it for three years). Figures.

Can you still receive the tax credit if you a owner-builder? If so, what would be the cut off date?

Owner builder isn't specifically addressed that I know of. This is just a guess, but if you could prove you started construction by the end of April and moved in by the end of June, that might be enough. If there was a construction loan, I would bet that it would have to be closed by the last of April.

I would direct the question to the IRS.

The IRS has just updated their web site with more information on the repeat buyers tax credit. You should read it for yourselves, but I'll pass on a couple of things that jumped out at me.

The five year requirement now adds the "same principal residence" language.

It now appears that the occupancy date for everyone is the last day of June, provided a binding contract is in place the last day of April. No mention of "on your land," which came from the NAHB.

This tells me that the guidance coming from other than the IRS should be taken with a grain of salt, and the IRS is probably still formulating the rules.

Going strictly by the IRS web site, a lot of the questions are still unanswered.

Here is a link that might be useful: Update IRS Info

I justed started owner building in July and plan to occupy the home in late December so I can claim both the move up buyer credit and the geothermal credit. The township I am building in doesn't require a certificate of occupancy. What documentation will I need for my taxes? Just a change of address?

You might check directly with the IRS if you have a local office, (in my experience the phone operators don't always have the information I need) or you could consult a tax accountant. In our area we do need a C/O but the IRS is also asking for the HUD 1 which we will not have, so we are going to have to provide something different there. If you will be closing on a loan then the HUD 1 and a change of address might be enough. Perhaps once the filing forms come out there will be clarification on these issues.

Yikes. We owned a home and lived in it from December 1999 to April 2005. Then we sold it, moved to another state and bought a home in June 2005. We sold that in July 2009 and are now waiting for our new home build to be completed (hopefully by Feb 2010) - we will close on it then. It looks like I won't qualify because of the same principal residence clause. Yikes!!!