buying a fiRst home is a
big step! saVe now
Buying a first home is a big step. with the
homebuyeRs
Fortunately, trained professionals like
your RealtoR® aRe willing and able to help
tax cRedit
you thRough the pRocess. In addition to
the many benefits of homeownership,
homebuyeRs
the homebuyer tax credit and more
affordable prices make now an especially
tax cRedit
opportune time to purchase. Still, the
commitment is a substantial one, and the
NatIoNal aSSocIatIoN oF RealtoRS®
encourages you to ask questions and
buy a home and you get a be informed about the decision you are
tax bReak! making so that the home you buy is a
home you can enjoy for years to come.
otheR ResouRces foR fiRst-time homebuyeRs:
as part of the Housing and economic
Recovery act of 2008 and the american IRS guidance at http://www.irs.gov/newsroom/article/0,,id=187935,00.html
Recovery and Reinvestment act of 2009, http://www.realtor.org/home_buyers_and_sellers/preparing_for_homeownership
a First-time Homebuyer tax credit is now http://finance.realtor.com/homefinance/guides/buyers/
available. But this special http://www.hud.gov/buying/
tax bReak ends in 2009. http://www.freddiemac.com/corporate/buying_and_owning.html
an in-depth RefeRence guide to the
economic RecoVeRy
REALTORS® who have the Accredited Buyer’s Representative (ABR®)
a homebuyer tax credit has been designation have completed highly specialized training in representing buyers.
available for first-time homebuyers in To find an ABR® in your area and to receive a FREE Homebuyers Toolkit,
Washington, D.c. for many years, and
now first-time homebuyers nationwide
visit www.REBAC.net.
© 2009 NATIONAL ASSOCIATION OF REALTORS®
All rights reserved.
Item #135-90
(04/09 BFC)
act of 2009
can take advantage of a similar benefit.
In this brochure we’ll discuss some of the
provisions of the credit, changes based
on the new legislation, and explain how
to use it.

how big is the tax cRedit? what about Repayment?
The Tax cRedIT IS equal To 10% of The the american Recovery and Reinvestment act of 2009
puRchaSe pRIce of youR home up To $8,000. made a big change to the credit by removing the repayment
the credit passed in 2008 was limited to $7,500 and that provision for credits on homes purchased in 2009. Previously,
limit still applies to homes purchased in 2008. the full the tax credit had a payback provision that made it similar to
credit is available for single individuals whose adjusted gross an interest free loan that would have been paid back in full
income is less than $75,000. If your adjusted gross income over 15 years (repayment) or at the time of resale (recapture)
is greater than $75,000 and your home purchase qualifies unless the home was sold at a loss. While the repayment
you for the full credit, the credit phases out according to provision is completely gone from the updated credit, a
the dollar amount (or percentage if less than $8,000) in the more mild recapture provision remains. If you sell your home
chart below. within 3 years of purchase, the entire amount of the credit is
recaptured, that is, the government takes it back.
fIRST-TIme homebuyeR cRedIT phaSe ouT
foR IndIvIdualS
$8,000
$8,000 aRe theRe otheR conditions
$6,000
i should know about?
$6,000
■■ You cannot claim both the Dc and the national First-time
$4,000 Homebuyer tax credit.
$4,000
$2,000 $0 ■■ Purchases by non-resident aliens are not eligible.
$2,000
am i eligible? $0
100% 75% 50% 25% 0%
■■ 2009 purchases financed by proceeds from a qualified
First-time homebuyers who purchase a principle $75,000 $80,000 $85,000 $90,000 $95,000 mortgage issue are now eligible.
residence on april 9, 2008 and before December Adjusted Gross Income (AGI) for Individuals
Homebuyer tax credit for Homes > $75,000 ■■ any single family residence located in the United States
1, 2009 are eligible. If you (and your spouse, if
Percentages indicate the remaining part of credit available at the given aGI. that will be used as a principal residence is eligible.
married) have not owned your principle residence
Generally, this is the place where an individual spends
for a 3-year period before your purchase, and For married couples filing jointly, the credit begins to phase most of his/her time. this includes single-family detached
you have never taken advantage of the Dc first- out at an adjusted gross income of $150,000. the dollar housing, condos or coops, townhouses or any similar type
time homebuyer credit, you qualify as a first-time amounts in the chart below correspond to a phase out of the of new or existing dwelling.
homebuyer. full tax credit (percentages are for credits less than $8,000).
■■ the credit will not result in an individual owing additional
fIRST-TIme homebuyeR cRedIT phaSe ouT federal taxes under the alternative Minimum tax.
how does it woRk? foR maRRIed coupleS
like all tax credits, it will dIRecTly Reduce The $8,000
■■ Home purchases between relatives and other gifts of
$8,000 residences are not eligible for the credit.
ToTal amounT of TaxeS you owe. When
you file your taxes, for the year you purchased your $6,000
$6,000
■■ other tax benefits of homeownership are still in place.
home (2008 or 2009), you will be able to subtract
$4,000 the mortgage interest deduction, capital gains tax
the amount of the credit from your Federal income $4,000 exclusion, and property tax deduction are some well-
tax liability, increasing the size of your refund or $2,000 $0 known examples.
reducing the amount you owe. For example, you $2,000
file your ‘normal’ tax return and find that you owe 100% 75% 50% 25% 0%
$2,000 in taxes. With this credit, your tax liability
$0
$150,000 $155,000 $160,000 $165,000 $170,000 for more specific questions about the tax
could be lowered by $8,000—which means, you Adjusted Gross Income (AGI) for Individuals implications of the credit, please consult a
instead get a $6,000 tax ReFUND check from IRS. Homebuyer tax credit for Homes > $75,000 tax professional.
Percentages indicate the remaining part of credit available at the given aGI.