First-Time Homebuyer Tax Credit

• "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 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.


• 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.

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