Tax Credit Home Buyer 8000
September 25th, 2010
Question: Can I claim the $8000 first time home buyer tax credit if I convert my home to a two-family dwelling?
Two hypothetical questions:
1) My home that I bought last year has long been a one-family home. I’m considering converting it back to a two-family home (it was long ago) and taking on a renter. Can I keep the $8000 tax credit?
2) What if I purchase a second home closer to work, but keep my first house as my primary residence? I would keep my own apartment there (as my primary residence), while still renting to the upstairs neighbor. Can I keep this tax credit?
Answer: If you purchase a home which becomes your principal residence, and then after the purchase divide it into two living units and convert one to a rental unit, then the original property is no longer your principal residence. There is no provision for a partial payback of the credit. If a property is converted to a rental property, in full or in part, the entire credit is paid back.
As for your second question, your principal residence is where you spend most of your time. If you live in the second home during the week for example, and your apartment during the weekend, then the second home is your primary residence and you will have to pay back the full $8K regardless of any rental activity. If you still spend most of your time at the apartment, the purchase of another home has no bearing on the FTHB credit.
Current interest rate tops federal tax credit
CLIFTON – With the $8,000 first time buyer and the $6,500 repeat home buyer tax credits offered by the federal government behind us, many buyers may feel that they missed a once in a lifetime opportunity. To the contrary, the best opportunity for all home buyers exists today, with the lowest interest rates in over 50 years.
8000 First Time Home Buyer Tax Credit
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