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First-time homebuyer tax creditThere’s good news for first-time homebuyers. New tax credits may mean new buying
opportunities for your qualified homebuyers. Effective January 1, 2009, qualified first-time
homebuyers may be eligible for a federal tax credit of up to $8,000. Below are some of the key highlights of the program:1
For First-Time Homebuyers Only: qualifying homebuyers have not owned a principal
residence during the three-year period prior to the purchase.
· Amount of Tax Credit: equals 10 percent of the home’s purchase price up to a maximum of
$8,000.
· Limited Time Only: The tax credit is available for homes purchased on or after January 1, 2009
and before December 1, 2009.
· No Repayment Required: unlike the previous tax credit, this tax credit does not have to be
repaid, but homebuyers must use the residence as a principal residence for at least three years or
face recapture of the tax credit amount.
· Tax Credit Is Refundable: the homebuyer credit can be claimed even if the taxpayer has little
or no federal income tax liability to offset. A refund check may be issued to the taxpayer for a
portion or even all of the refundable tax credit (depending on the taxpayer’s tax liability).
· Income Restrictions: Single taxpayers with incomes up to $75,000 and married couples with
incomes up to $150,000 qualify for the full tax credit. (Partial tax credits may be available for
taxpayers with incomes over the above limits).2
· 2008 Tax Returns: tax credit can be claimed on 2008 federal income tax returns if the home
was purchased on or after January 1, 2009.
1. Guidelines effective as of 03/09 and are subject to change without notice.
2. Restrictions apply. Consult your tax advisor for details.
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