First time homebuyer credit
Beginning in 2008 under the American Recovery and Reinvestment Act (ARRA) a first time homebuyer is entitled to a credit of $7,500 upon the purchase of their principal residence. This credit is essentially a 15-year interest free loan that has to be repaid in installments beginning in the second tax year after purchase of the home.
For 2009 the credit jumps to $8,000 and does not have to be repaid! If a taxpayer has not claimed the credit on their 2008 tax return, they may file an amended tax return to claim the credit. An amended return form is available here.
The restrictions on these credits are that the home must be the principal residence of the taxpayer, it must be a first time purchase for the taxpayer and the taxpayer must maintain the home as their principal residence for 36 months. If the residence ceases to be the principal residence then the credit must be repaid in the tax year that the residence ceases being the principal residence.
Click the button to see questions and answers on the first time homebuyers credit.
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