First Time Homebuyer Program

Congress extends deadline on 1st time homebuyers tax credit

Recently , congress approved legislation that will extend the first time homebuyer program tax credit to beyond its initial deadline of November 30 and to also expand it to an even wider group of homebuyers.

First time Homebuyer program Q and A

Q. Who is eligible to claim the First time and repeat homebuyer tax credit?

A. Anyone who purchases a principle residence is eligible for the homebuyer tax credit. First time homebuyers are eligible if they have not owned a home in the previous 3 years. Repeat buyers are eligible if they have owned a home for 5 of the last 8 years.

Q. What is the definition of a 1st time home buyer?

A. The definition of a first time home buyer is someone who has owned a principle home for the last 3 years. If it’s a couple, this rule applies to both husband and wife.

Q. How is the amount of the tax credit determined? A. The amount of the tax credit is 10 % of the purchase price…up to 8000 dollars for a first time homebuyer and up to 6500 dollars for a repeat homebuyer. People often refer to this tax credit as the "8000 homebuyer tax credit."

Q. Are there any income limits for claiming the tax credit?

A. Yes, There are income limits. For a single buyer, the income limit is 125,000 dollars annual income, and for married couples its 225,000 dollars. There are some allowances for incomes that exceed the limits to receive a percentage of the home buyers tax credit.

Q. What types of homes will qualify for the home buyers tax credit?

A. The home purchased must be a principle residence. Beyond that , it can be a single family home, a condo, a townhouse, etc.As long as the home is your principle residence, it qualifies for the tax credit.

Q. Is there a price limit on eligible homes?

A. the purchase price Cannot exceed 800000 dollars.(wow thats a relief..not a problem for me)

Q. How do I claim the 1st time homebuyer tax credit?

A. By filling out IRS form 5405 when you file your income tax return

You can either refile a past years return or wait until the next tax return to submit form 5405.

Q. If I qualify for the home buyers tax credit and buy a home in 2009 or 2010, can I apply the tax credit against my 2008 or 2009 tax return?

A. You can refile your 2008 tax return if you purchase a home in 2009. And likewise you can refile your 2009 return after you have purchased a home in 2010.
learn more about the first time homebuyer program