I was leafing through some old newsletters the other day, and came across a couple of articles I had written awhile back. They encouraged buyers to take advantage of the great tax credits that were available to first-time home buyers in 2008, and a year or so later for move up or repeat home buyers. Seems like ancient history now. It's pretty amazing that most of those credits expired just a year ago.So why talk about them in May of 2011? Who cares? Well, if you claimed one of those great tax credits from Uncle Sam, and are now thinking of selling, pay attention. You might be feelin' good about the real estate market and are thinking the great prices and good interest rates currently available make this a good time to sell that perfect house you bought, and move up.
In fact, it IS a good time to be looking around for that next dream home. You CAN find some really attractive interest rates and some good pricing on homes in the neighborhoods where you want to live.
You know there's a but coming... and here it is. While all of the above is true, remember to consult your tax professional if you're now thinking of selling. Why? There's small print in the rules about those tax credits.
Remember, the 2008 tax credit was a loan which has to be repaid over 15 years. If you sell your home before you have repaid that credit, all of the remaining balance becomes due when you close. That could possibly mean a significant tax liability next year!
As far as the $8000 First-Time Home Buyer Tax Credit and the $6500 Move Up/Repeat Home Buyer Credit offered in 2009 and 2010, those credits don't have to be repaid UNLESS you sell the home within three years after the initial purchase.
There are exceptions, but if you used one of those tax credits, you better take a moment to remember the fine print, and consult your tax professional before you put your house on the market!
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