Tag Archives: 2009 Tax

The Worker, Homeownership, and Business Assistance Act of 2009

WHAT DOES IT MEAN FOR CURRENT HOMEOWNERS?

Special Rule for Current Homeowners
Taxpayers who are considered “long-time residents” of the same principal residence are now eligible to claim a credit that is equal to the lesser of a) 10% of the purchase price, or b) $6,500 ($3,250 MFS) of a subsequent principal residence. A long-time resident is one who has owned a home and used it as a principal residence for any 5 consecutive years during the 8-year period preceding the purchase of the subsequent principal residence.

This provision is effective with homes purchased after November 6, 2009. All other new rules (new phase-out range, purchase price cap, last date available for the credit) apply as well. There is no requirement that the taxpayer sell the first residence-it can be sold, converted to rental property, given as a gift, etc. as long as the taxpayer occupies the subsequent home as a principal residence.