Home Buyer Tax Credit

Formerly known as the "First-Time Home Buyer Tax Credit", the Home Buyer Tax Credit is like a gift certificate that you can use to pay your taxes. Here is how it works:

Do you fit the criteria?
A "first time home buyer" is defined as someone who has not owned a home in the last three years. If you are a "first-time home buyer", your tax credit will amount to 10% of the purchase price of your new home not to exceed $8,000.

A "long-time resident" is defined as someone who has lived in the same primary home for 5 out of the past 8 years. If you are a "long-time resident", your tax credit will amount to 10% of the purchase price of your new home not to exceed $6,500. *This is a "move-up" tax credit, so the resident must be selling their home and purchasing a new one.

What else do I need to know?
Single taxpayers with incomes up to $125,000 and married couples with income up to $225,000 qualify for the full tax credit. *If you are married, both spouses must qualify for the credit.


You cannot purchase the home from a related party like a spouse, direct ancestor, or direct lineal descendant (child or grandchild); however, you can still qualify for the credit if you purchase a property from siblings, nephews, nieces and others (i.e. non-relatives).

The credit applies even if you have co-signers on your mortgage loan.

The credit applies to 1 - 4 unit homes as long as you live in one of the units as your primary residence.

When does the tax credit expire?
The home must be purchased for less than $800,000 before May 1, 2010. *If you sign a binding contract to purchase a home before May 1st, you would need to close on the transaction before July 1, 2010.

How do I receive my refund?
For information about obtaining the Home Buyer Tax Credit (if you purchased a home or are purchasing a home before May 1, 2010), please contact your CPA or visit http://www.irs.gov/.