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.

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.

Unfortunately, I didn't bookmark it.

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

Lori

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

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 taxpayer’s 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.

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.

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

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.

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.

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.

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

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!

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.

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.

I would direct the question to the IRS.

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.