If we sell a property on a Contract for Deed, then does the homebuyer qualify for the First homebuyer tax credit of $8000?
The buyer qualifies only if the buyer is a first time home buyer AND occupies the property as his/her primary residence. Just purchasing on contract for deed does not automatically qualify your buyer for the tax credit.
Dave,
Agreed, buyer needs to be a first time home buyer & stay there.
Typically in the Contract for Deed, the home buyer does not have a Grant deed in his/her name until they complete the contract obligations.
I guess you are suggesting that its ok, they will still be able to qualify for the first time homebuyer program.
I’m not a tax lawyer but I think you have to be on the deed to qualify for the tax credit.
You will have equitable title but not legal title. The new home buyer can be someone who hasn’t bought a home in 3 years and doesn’t currently own a home. Herbster
The IRS treats a sale on contract for deed as an installment sale. The buyer in a contract for deed is the equitable owner and is entitled to all the tax benefits that accrue to homeowners, to include the first time homebuyer tax credit if the buyer is otherwise qualified.