Utah Legal Advice - Avail Tax Benefits when Selling Your Home

Sept. 15, 2011 - PRLog -- Salt Lake Law Firm: In general, Owning a home is the dream of every one. But, if you think that you cannot fulfill your dream because of the economic recession, the federal government has come up with a tax credit plan that will rekindle your interest in real estate. The government provides home renovation tax credit for making energy-efficient improvements to your home.

A large number of homeowners have already taken advantage of this program in the last two years. Taking into account the huge success of the program, the government has provided an extension of the project. The plan will infuse energy into the real estate market. Thus the real estate buying through this plan requires some forethought and the knowledge about their eligibility.

Only for First-Time Home Buyers: Only first-time home buyers are qualified to avail this credit. A first-time home buyer, in this context, is someone who hasn't owned a principal residence for three years prior to buying the house. But, if somebody owns a vacation home or a rental property, but not a principal residence, if he/she can be considered for the credit.

Partial tax credits: However, there are certain categories of improvements that limit the amount of available credit to a lower amount.

Basic Requirements: The individuals taking benefits of the credit should be paying taxes on time. The home on which the credit is availed should be the primary residence of the claimants and they should reside in the home.

Income Limit: Then You should also be aware of the income limit to which the tax credit has been subjected to. If your earning is more than this, you will be given reduced credits only.

Spouse Should Not Own Principal Residence: If you are married, the authorities also check whether your spouse had any real estate transactions that involved the purchase of any principal residence in the previous three years.

Home For Three Years -must : Another condition stipulated by the authorities is that the first-time home buyers have to keep the home, their most important real estate possession.If you decide to sell your home before the stipulated three-year period ends, the credit has to be given back to the government. Exceptional situations resulting from death or divorce would be considered in this case.

So , When the opportunity to possess the home of your dream knocks on your door, you should first judge yourself whether you are eligible to be considered a first-time buyer.

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