Friday, October 23, 2009

The registry's role in documenting first-time homebuyer credit

Officials from the IRS and Treasury Department recently testified before a Congressional subcommittee regarding the first time homebuyer credit program. We’ve written about this before, primarily in the context of the surge in recordings it is expected to bring to us at the end of November. For those unfamiliar with the program, taxpayers who have not owned a residence in the past three years are eligible for a tax credit of up to $8000 for a residence purchased no later than November 30, 2009. The credit is a refundable one, so taxpayers with little or no tax liability would receive their credit as a tax refund.

In its reporting on this committee hearing, the mainstream media has focused almost exclusively on testimony that quantified the number of questionable or fraudulent claims. For example, of the 1.5 million who have claimed the credit thus far, the validity of approximately 100,000 of those claims is in doubt. Two examples: 19,000 claimants had yet to purchase the home for which the claim was made (you have to have already closed on the property before claiming the refund) and 580 claimants were under the age of 18 which is the minimum age for participation in the program).

One thing that seems clear is that the claimant has actually purchased the property within the time allowed. The best proof of that, I assume, would be a copy of the recorded deed. So, if the IRS does implement new documentation requirements when claiming this credit, we here at the registry of deeds should see a sudden increase in the number of folks looking for a copy of their deed.

No comments: