I was chatting with a friend the other day and she brought up that there’d been some changes in her life and she was now having to think about selling the home she bought a year and a half ago. Her question was about the tax credit. “What happens if I sell my home before the 5 years?”
Because it’s been so recent, I hadn’t had the chance to do much research on this question, so I went into ‘research mode’ before giving her any answers and I thought I’d share with you what I’ve found.
It depends on exactly when you bought the home. It’s 36 months. But, if you do sell before 36 months, the tax credit will be payable at the time of close but is limited to the amount of proceeds you receive on the home. Let’s say you sell your house and you have $7,000 left to repay, but you only net $2000 profit on the sale. The government can only take that $2000 and it looks like the rest will be written off.
Here’s the government website where YOU can do more research if you’d like.