Buying a Home & Getting Married: Qualify for the First Time Buyer's Tax Credit?

[Poitiers2]

Surely there has to be someone else out there in this boat.

I have never owned a home. My fiance and I plan on buying one this year. The idea of getting an $8,000 tax credit on this home sounds awesome. But my fiance HAS purchased a home in the past 3 years.

Thus, my question is if whether I qualify for the $8,000 first-time buyers tax incentive if we purchase a home before we get married. I know that unmarried couples qualify for the tax credit, even if one party doesn't meet all the standards to qualify. For instance, a father and daughter, even if the father makes too much money or has owned a home previously, can purchase together and let the daughter receive the full tax credit.

Can I do the same while being married in the same year but after the home is purchased?

I'd think so, but I'm not sure...

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[schwab]

My Fiancee and I are in the same situation and I think I have bad news. If you're married on December 31st at 11:59pm, the government considers you married for the entire year for tax purposes.

If you look at the text of the stimulus bill, the wording about the $8000 tax credit is merely an update to the $7500 credit enacted last September in the form of a larger credit amount ($8000) and the removal of the requirement that you pay the money back. That last credit is detailed at this Fairmark page (Fairmark is a pretty well respected tax authority): http://www.fairmark.com/news/08073001-homebuyer-credit.htm. You'll notice under the Eligibility section the following sentence: If you're married, your spouse must meet this requirement as well.

So it looks like we're out of luck unless we delay the marriages until after the first of the year.. I don't think I can talk my fiancee into it for $8000

 

[bjackrian]

Schwab, you might consider delaying the government part of the marriage until after the first of the year. I.e., do a religious or non-religious wedding with your family and friends and then do the legal part (marriage license + justice of the peace) after the 1st of the year. Just a thought, don't know what your fiancee would think about it.

 

[schwab]

Schwab, you might consider delaying the government part of the marriage until after the first of the year. I.e., do a religious or non-religious wedding with your family and friends and then do the legal part (marriage license + justice of the peace) after the 1st of the year. Just a thought, don't know what your fiancee would think about it.

Thanks for the tip - I've already tried I actually tried in the past when she was still a student so that I could claim her as a dependent, but that didn't go over so well, either.

 

[seelee]

I have a related question.

Is it possible to buy a home with student loans being your only income?

What about with a cosigner?

 

[dragonfly99]

seelee
I doubt you could do it by yourself, since when you try to qualify for a mortgage they look at your income and your assets (i.e. cars, other homes, etc that you own) and how much money you have in the bank, retirement accounts, etc. You have to document all that. Unless you happen to have a lot of money saved up (i.e. have the 20% down payment, etc.) I don't see how you could do it. Even if you DO have money to put down, I'm not sure how banks would feel about lending to somebody with no job...probably not good.

With a cosigner, I'd think whether you get the loan will depend on the assets and income of the cosigner (i.e. if parents have money and want to cosign the loan, you could probably get the loan).

 

[Poitiers2]

My Fiancee and I are in the same situation and I think I have bad news. If you're married on December 31st at 11:59pm, the government considers you married for the entire year for tax purposes.

Schwab, there might be an out. From that link you posted:

A special rule allows people who buy a home in 2009 (by the June 30 deadline) to claim the credit on their 2008 income tax return. If you've already filed your 2008 return you can amend it to claim the credit. Making this choice lets you get the money sooner than if you claim the credit on your 2009 return, but also requires you to start repaying the "loan" a year earlier, as described next.

If this same clause is in the 2009 home credit, well, you can go back to 2009 when you weren't married.

 

[Poitiers2]

I also saw this:

If you are planning to marry in 2009 and also planning to buy a house in 2009 then it may matter in which order you do this. For the purpose of qualifying for this $8000 home buyer tax credit only your martial status on the date of purchase matters. Note that is your fiance/fiancee is not a first time home buyer and you are, then it is better that you buy a house first, claim the $8000 home buyer tax rebate and then get married.

http://niftyprediction.blogspot.com/2009/03/8000-home-buyer-tax-credit-stimulus-for.html

 

[Poitiers2]

http://weblogs.baltimoresun.com/bus...g/2009/03/tax_experts_advice_on_8000_fir.html

Q. I am planning on purchasing a home in June 2009. I am getting married May 23, 2009. My fiancé has owned a home in the past three years. I am not planning on putting his name on anything. If I buy the house after we are married but amend my 08 taxes do I still qualify since I was single in 08? I am trying to figure out if amending to 08 will qualify me even after we are married. I forgot to mention I have never owned a home. I think I am in a gray area and no one has an answer.

A. Unfortunately you will not qualify for the First-Time Homebuyers credit if you buy the house after you are married, even if you claim the credit on your 2008 tax return. The qualifications for married taxpayers are you both have to qualify as first-time homebuyers when you buy the house. To qualify, neither of you could have owned an interest in a personal residence any time in the three years prior to the purchase date of the new house. However, if you buy the house before you are married, you will qualify for the credit.
These are similar questions, and the answers are the same:

Q. I may need to have my sister co-sign a loan for me. She does own a home already and will not be living with me in the house I am buying, would I be able to receive the $8,000 tax credit?
Q. I am closing on our house February 25, 2009. I am a first-time homeowner but my fiancé co-signed the home with me and he has owned a home before. Do I qualify for the $8000 credit on my income tax?
Q. I am looking to buy a house and get a loan under my name (primary) and my mom's name (secondary). My mom will not be living in the house. If I am a first time home buyer but my mom isn't, am I still eligible for the tax credit? Her name won't be on the deed.
A. You would be able to claim the First-Time Homebuyers credit of 10% of the purchase price up to $8,000. You also have the option of waiting to file your 2009 tax return to claim the credit, or claiming the credit on your 2008 tax return and receiving the money now. If you have already filed the return, you may amend your return to claim the credit.
Q. My wife and I got married in August 2007. At that time, I was the owner of a house where we lived for some time. The house was foreclosed on in the middle of 2008. Is my wife considered a first time home buyer? She never bought any property.
A. Unfortunately you will not qualify for the First-Time Homebuyers credit. The qualifications for married taxpayers are you both have to qualify as first-time homebuyers when you buy the house. To qualify, neither of you could have owned an interest in a personal residence any time in the three years prior to the purchase date of the new house.
Q. I'm scheduled to be married in June, 2009 and have never owned a home, but my fiancée has. Can we still qualify for this deduction if we are not married before we purchase the home? Can we still qualify if I leave her off the deed but keep her on the loan? Alternatively, could we just amend our 08 filings to include the home?
A. You would be able to claim the First-Time Homebuyers credit of 10% of the purchase price up to $8,000. You also have the option of waiting to file your 2009 tax return to claim the credit, or claiming the credit on your 2008 tax return and receiving the money now. If you have already filed the return, you may amend your return to claim the credit.

 

[Phat Pharm]

The OBAMA tax credit--the $8000 one that does not have to be paid back is only for those who do not earn over $75,000 per year. Be wary. Plus, this credit can not be applied to the down payment of your home, but towards the return on your taxes. Hope this helps, sorry no cite.

 

[meteor2]

Also be aware that in order to fully get that free 8k from the goverment, you need to use that home as the principle residence, not an investment or rental home. If you later sell that home as an investment or rental property or do a 1031 exchange on that home, you are required to pay back the 8k on your tax return of that year.

I'm not entirely clear about the principle residence rule, whether you must live in the home for at least 2+ years for that be eligible or you can just claim it as principle residence and sell it within 1 year. You gotta check with the tax advisor since you may have to pay back the 8k if you do the latter.