Today TaxMama hears from Carole in Washington State who tells us. “My brother, a 1st time real estate buyer, is considering the purchase of a property with a garage/shop on it (not a house). Would this purchase qualify for the $8,000.00 1st time buyer tax credit?”
The credit is to help people buy homes – not investment property? They’re on their own for that.
If your brother were to fix up the property so it included a residence – and got an occupancy permit, that part of the property would qualify as a home. So, he could get 10% of the sales price on the residential part of the property as his first time homebuyers credit.
On the other hand, if your brother is any good at running a garage, he’ll generate a lot more money from the income the place produces than the first time homebuyer’s credit.
So, I wouldn’t reject the investment just because there is no government incentive.
If he’s got the skills and training in auto mechanics, go for it.
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People are more apt to be fixing cars these days than buying them. Wish him luck!
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