- The Internal Revenue Service defines a first-time homebuyer as “any individual (and spouse, if married) who had no present ownership interest in a qualifying principal residence during the 3-year period ending on the date of purchase of the principal residence for which a first-time homebuyer credit is being claimed.” Certain homebuyers, such as non-resident aliens, and those who acquired their home as a gift or through an inheritance, do not qualify for the credit.
- For homes purchased in 2008, the credit had a worth up to $7,500 for home purchases after April 8, 2008 and on or before Dec. 31, 2008. In this year, the credit was similar to a loan and required repayment in 15 equal, annual installments beginning in 2010. For modified adjusted gross incomes (MAGIs) up to $75,000 for single and $150,000 for joint filing taxpayers, the full tax credit applied.
- For homes purchased in 2009 prior to Dec. 1, the credit increased to $8,000. Home purchases were eligible for the credit if a binding contract existed before May 1, 2010 and the closing date on the home was before Sept. 30, 2010. The credit could be claimed on a 2008 or 2009 tax return, as long as it was after the closing date, and the credit wasn’t repaid unless the taxpayer stopped living in the home within three years after the date of purchase. For purchases after Nov. 6, 2009, the income limits were raised; single taxpayers with MAGI up to $125,000 and joint filers with MAGI up to $225,000 were able to get the full credit.
- For homes purchased in 2010, a taxpayer had to have a valid purchase contract by April 30, 2010 and a closing date by June 30, 2010. Taxpayers could claim the tax on their 2009 or 2010 tax returns. The credit was authorized to “long-time residents,” who could claim up to $6,500 if they had lived in a primary residence for five consecutive years of an eight-year period ending on the date of a new primary home purchase. The credit repayment provisions applicable in 2009 also applied in 2010. The change in income limits applied after Nov. 6, 2009 was applicable in 2010.
Definition of a First-Time Homebuyer
2008 Home Purchases and Income Limits
2009 Home Purchases and Income Limits
2010 Home Purchases and Income Limits
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