They say the devil is in the details, but many people “bought up” thinking that they were entitled to the credit, only to find out that an arbitrary provision, that when loosely interpreted by the IRS would disqualify them, simply because they.

Clearly the provisions surrounding married taxpayers, who didn’t co-own the house, are anti-marriage and anti-family. That is unless your definition of marriage and family requires strict adherence to co-ownership of all assets.

But because she was married to a non-owner, she is not eligible for the $6,500 credit. IRS website confirms this. See credit Q & A.

So let me get this straight. If we didn’t get married, she could have claimed the $6,500 credit if she bought the new house. And if we didn’t get married, the I could have claimed the $8,000 credit if I bought the new house. But because we were married, we can’t claim either credit. There are provisions for unmarried couples jointly buying up. Makes absolutely no sense.

H.R. 3548
(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.

As I read it, since we lived in our first house for 7.5 years out of the 8 prior to purchasing the second, we qualify. My wife and I don’t make anywhere near the old $150,000 or the new $225,000 income limit. I think this expansion was written with my family in mind, and I appreciate it. I’ve always tried to live within my means, and I have done my part to help spur the economy during this crisis. The only stupid thing is that they should have written it this way to start so that more people would have been given incentive to buy homes.

While it would suck to not qualify because you bought your last home in 2004, it actually makes sense to me to not reward the behavior of buying a different home with a frequency of under 5 years. My wife and I stuck it out in our first home for nearly 11 years with our growing family while everyone around us was upgrading constantly – riding and contributing to the ridiculous rise in home prices. I was conservative with my money when conservative wasn’t cool, and spent it when the economy needed it; so you’ll forgive me if I’m not too embarrassed about taking the $6,500.

As for your property taxes — yes, yours are quite high, especially copmpared to where I live (my taxes are $1400 a year on a home with assessed value of $141,000). However, since your taxes were assessed when your home was worth close to $100,000 more than it is now, there should be some mechanism whereby you can appeal the tax amount and get the taxes reduced. Property taxes, by law, are based strictly upon value, so your taxes ought to reflect the home’s current, lower value.