As part of the economic stimulus package to revitalize the housing industry, Congress passed legislation granting an $8,000 tax credit to first-time home buyers. To qualify, a "first-time home buyer" must not have owned a residence during the past three years and must purchase between January 1, 2009 and December 1, 2009. The credit can be used on primary residences, including single-family homes, condos, townhomes and co-ops.
The credit is determined by two factors—the price of the home and the buyer’s income. The credit is equal to 10% of the purchase price of the home, up to $8,000. When considering income, the maximum credit of $8,000 is available for incomes up to $75,000 for singles and $150,000 for married couples. The credit will be reduced for incomes ranging between $75,000 and $95,000 for single buyers and $150,000 and $170,000 for couples. The credit can be calculated on the IRS Tax Form 5405 (PDF).
IRS: First-Time Home Buyer Tax Information>>
IRS Tax Form 5405: First-Time Homebuyer Credit>> (PDF)
NAR: "The Basics—2009 First-Time Home Buyer Tax Credit>>
FAR Flyer: What you should know about the $8k tax credit>> (PDF)
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