The frequently asked question about the new federal tax credit for first time home buyers is “does it have to be repaid”? The answer isn’t exactly a cut and dry and yes or no.
What the government has defined as a first time home buyer is misleading in my opinion. It’s actually a big bonus because it really isn’t just for first time homebuyers.
What is the definition of a first-time home buyer?
The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse. For example, if you have not owned a home in the past three years but your spouse has owned a principal residence, neither you nor your spouse qualifies for the first-time home buyer tax credit.
Find out details of NEW Tax Credit updated as of Feb. 2009
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