First Time Home Buyer

[Robbie1]

Client is buying a duplex. She is using the entire building for her principle residence, does not intend on renting any of it.
Does the building have to be a single family building, if there are no renters, to qualify?

Does she get the full $8000.00? (qualifies otherwise)

And if she rents it out within the 36 months, she pays it back. Right? What about after 36 months?

[solomon]

Simply allocate half of the cost to the residential part.

[Robbie1]

She wants the whole $8000, cuz the realtor says so!

[JohnH]

Maybe the realtor should prepare the return.

[solomon]

She wants the whole $8000, cuz the realtor says so!

Then she must use the empty part for personal purposes as well to claim the entire property.

[solomon]

Maybe the realtor should prepare the return.

Well stated.

[Bees Knees]

Does the building have to be a single family building, if there are no renters, to qualify?

A duplex is a building that has two separate living accommodations. I’m sure if your client bought a 32 unit apartment complex and said she wanted to live in all 32 units, you would say no to the first time homebuyer credit for all 32 units. What is the difference? At what point of living in more than one unit do you say you are living in more than one home?

I would say if she wants to convert the duplex back into a single family home by knocking down the walls that separate the living spaces, then she can treat the entire house as her primary residence. If not, she is actually living in 2 homes. You cannot claim the first time homebuyer credit on the 2nd home.

[Robbie1]

ok two answers for every question.


Bees, that does make sense.

[BOB W]

If half of the duplex is worth $80,000 or more, than getting the $8,000 is no problem>even if the other half is rented out..

[Robbie1]

Thanks, ALL GOOD!

[DonPriebe]

A duplex is a building that has two separate living accommodations. I’m sure if your client bought a 32 unit apartment complex and said she wanted to live in all 32 units, you would say no to the first time homebuyer credit for all 32 units. What is the difference? At what point of living in more than one unit do you say you are living in more than one home?

As usual, "It Depends". A duplex composed of two single bedroom units housing a family with two kids passes the smell test; a pair of three bedroom units housing a single person or a married couple with no kids probably doesn't.

Maybe the key is actually using both units, and not just leaving one substantially vacant.

[Robbie1]

Client has an extensive book collection, and a boyfriend. Says both units will be filled with her stuff. and his Says she would only want ot rent if he dumps her.

[JohnH]

No sane guy is going to dump a girlfriend with free rent and an $8,000 tax credit to spend.

[Davc]

Agree with Bees. The key here is that the duplex is two "dwelling units". Physically converting the property to a single unit is the only way to use the entire purchase price.