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FIRST TIME HOME BUYER TAX CREDIT OF UP TO $8,000...when you purchase a primary residence. Credit is available to first-time homebuyers.*
Quick Summary of the First-Time Homebuyer Credit
*First-time buyer means an individual who has not owned a principal residence in previous three years.
The tax credit is worth 10% of the purchase price of the home or a maximum of $8,000 (or $4,000 for married couples filing separately).
Qualifying as a First-Time Homebuyer - For the purpose of this tax credit, a first-time homebuyer is defined as someone who has not owned a primary residence in the three-year period ending on the date of purchasing the home.
Limited Time Period for Purchasing a Residence - The credit has a very limited life-span. Individuals will need to purchase a residence after April 9, 2008, and before December 1, 2009. What's a Primary Residence - A primary residence is a residence in which an individual lives most of the time. A primary residence can be a house, condominium, co-operative apartment, houseboat, or mobile home. Because the tax credit is for people who purchase their primary residence, individuals may qualify for the tax credit even if they own a vacation home or rental property as long as those properties were not their primary residence for at least three years preceding the purchase of their new home.
Income Phase-out Range - The credit is phased out for individuals with modified adjusted gross income between $75,000 and $95,000. For married couples filing a joint return, the phase out range is $150,000 to $170,000.
When to Claim the Credit - The credit is fully refundable, meaning taxpayers will be able to obtain an additional federal tax refund of up to $8,000 even if they have no other tax liabilities.
Tax Form to Claim the First-Time Homebuyer Credit
Form 5405 (pdf, 3 pages including instructions)
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