Downsizing your Home? The Tax Credit is For You Too!

January 17, 2010

The tax credit is not just for those buying a bigger home, it also works for those wishing to downsize. When the First Time Home Buyer Tax credit was extended and expanded late last year, most people thought the expansion was only for home owners who wanted to move up, those who wished to buy a bigger, more expensive home. In fact, the expansion simply includes those who have owned a primary residence and lived in it for at least five years consecutive years out of the last eight years. If current home owners want to downsize they can use the tax credit toward their new home, regardless of whether it costs less than the home that they are selling, regardless of whether it is smaller than the one that they are selling.

Everyone we talk to assumes the tax credit is only for purchasing bigger and better. Many people however, especially those whose children have grown and left the nest, want to downsize. After-all, who doesn’t want to make life simpler these days?

If you have been considering selling your home and moving into a smaller space, consider doing so before the tax credit expires. Place your new home under contract by April 30th and close by June 30th and you could have a few extra dollars in your pocket.