If you are a first-time homebuyer, you may be able to claim a one-time tax credit equal to the lesser of:

• $7,500 ($8,000 if you purchased your home in 2009), but only half of that amount if married filing separately, or
• 10% of the purchase price of your home.

You may be able to claim the credit if:

• You purchased your main home in the United States after April 8, 2008, and before December 1, 2009, and
• You (and your spouse if married) did not own any other main home during the 3-year period ending on the date of purchase.

If you constructed your main home, you are treated as having purchased it on the date you first occupied it.

Who cannot claim the credit. You cannot claim the credit if any of the following apply.

• Your modified adjusted gross income is $95,000 or more ($170,000 or more if married filing jointly).
• You are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. See Form 8859. This rule does not apply for a home purchased in 2009.
• Your home financing comes from tax-exempt mortgage revenue bonds. This rule does not apply for a home purchased in 2009.
• You are a nonresident alien
• Your home is located outside the United States
• You sell the home, or it ceases to be your main home, before the end of 2008
• You acquired your home by gift or inheritance
• You acquired your home from a related person. A related person includes:
  • Your spouse, ancestors (parents, grandparents, etc.), or lineal descendants (children, grandchildren, etc.)
  • A corporation in which you directly or indirectly own more than 50% in value of the outstanding stock of the corporation
  • A partnership in which you directly or indirectly own more than 50% of the capital interest or profits interests

Repayment of credit

Homes purchased in 2008. You generally must repay the credit over a 15-year period in 15 equal installments. The repayment period begins in 2010 and you must include the first installment as additional tax on your 2010 tax return.
     If your home ceases to be your main home before the 15-year period is up, you must include all remaining annual installments as additional tax on the return for the tax year that happens. This includes situations where you sell the home, you convert it to business or rental property, or the home is destroyed, condemned, or disposed of under threat of condemnation.

Homes purchased in 2009. You must repay the credit only if the home ceases to be your main home within the 36-month period beginning on the purchase date. This includes situations where you sell the home, you convert it to business or rental property, or the home is destroyed, condemned, or disposed of under threat of condemnation. You repay the credit by including it as additional tax on the return for the year the home ceases to be your main home. If the home continues to be your main home for at least 36 months beginning on the purchase date, you do not have to repay any of the credit.

More Information. For exceptions to the repayment rule, more information about the credit, and how to claim the credit, see Form 5405, First-Time Homebuyer Credit.