First Time Homebuyer Tax Credit

$8,000 Homebuyer Tax Credit at a Glance
  • A "First-Time Homebuyer" is defined as a person who has not owned a home for the past three years.
  • The tax credit is equal to 10 percent of the home’s purchase price up to $8,000.
  • The credit is available for homes purchased on or after January 1 and before December 1, 2009.
  • Homebuyers may purchase any new or existing single dwelling home including condos and townhomes.
  • The tax credit does not have to be repaid if the home isn’t sold within three years of purchase.
  • The tax credit is "refundable" or claimable for the year of purchase regardless of the homebuyer’s tax liability.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
  • The homebuyers may participate in a mortgage revenue bond program such as NIFA and still be eligible for the tax credit.

    First-Time Homebuyer Tax Credit FAQs
    First-Time Homebuyers Guide
    Mortgage Pre-Qualification
    First-Time Homebuyers Information Request

First-Time Homebuyer Tax Credit example:
    A couple with joint income less than $150,000 annually.

    The couple purchase a house for more than $80,000 on or after January 1, 2009 and before December 1, 2009. The couple qualifies for the full $8,000 tax credit.

    Assume their 2009 federal tax liability is $12,000 without the tax credit, the $8,000 tax credit would lower their federal tax liability to only $4,000.

    If the couple’s 2009 federal withholdings was exactly $12,000, they would have received no refund without the tax credit because their federal income taxes equal their federal withholdings exactly.

    With the first-time homebuyer tax credit, the couple will get a tax refund of $8,000.

    First-time homebuyers should consult their tax advisor for more information.