Selling After a First Time Home Buyer Tax Credit is possible. Many people are not selling because they think they can’t! There are certain criteria that have to be met and depending on when you received the credit, there are different rules.
This tax credit from the Federal Government enabled a lot of people to buy a home who may not have otherwise been able to at the time. Many people bought what maybe wasn’t their ideal home, but just wanted to “get in the market”. This was an excellent strategy!
Now, the economy has improved and home values are rising. Many people are thinking that they would like to find their dream home by selling their property and moving up. Or keeping it as an investment rental property and getting another home. Recently we have met several buyers who thought they couldn’t do this because they feared there would be some sort of penalty from the IRS since they received the First-Time Home Buyer Tax Credit.
Good news! If you purchased a home in 2009 or 2010 and you received a First-Time Home Buyer Tax Credit, you are now able to sell and move up another home or rent out your home without penalty. The repayment period for this credit was 36 months. Since that time has lapsed, you are now able to sell your home without penalty.
However, first-time homebuyers who purchased new homes in 2008, subject to certain criteria, were eligible for a maximum credit of $7,500, which must be repaid over a 15-year period.
Here’s a summary of the rules as they apply to the First-Time Home Buyer Tax Credit.
If the home was purchased in 2008, the credit must be repaid over a 15-year period.
If the home was purchased in 2009 or 2010, it does not have to be repaid UNLESS the home ceases to be the principal residence within 36 months from the date of purchase.
For more detailed information on specifics visit IRS.gov publication First-Time Homebuyer Credit Questions and Answers: Homes Purchased in 2009 or 2010
If you own a home that was purchased with a First-Time Home Buyer Tax Credit and you would like to sell, please give us a call (919) 800-0880. We can guide you through the process and ensure you get top dollar for your current home and a great deal on your dream home.
If you would like to speak to a lender about your options, Contact The Multari Team at Movement Mortgage. They are experts in working with buyers in the Raleigh market!