📅 2026 Update: Changes to Home Buyer Tax Credits and Related Programs

Since the original article was written, important updates have occurred regarding tax credits for first-time homebuyers. These changes include aspects related to the Historic Preservation Tax Credit and the expiration of certain clean vehicle tax credits. The earlier article continues further down the page for more foundational information.

🏡 First-Time Homebuyer Credit Deadlines

The first-time homebuyer credit was available only for homes purchased on or after April 9, 2008, and on or before December 31, 2008. No new credits have been introduced since then for first-time homebuyers.

🏛️ Historic Preservation Tax Credit Economic Impact

In fiscal year 2025, private investments in historic rehabilitation projects reached an estimated $9.6 billion. This investment generated about 163,000 jobs and contributed approximately $9.2 billion to the U.S. GDP.

This impact highlights the importance of tax credits not only for homeowners but for the broader economy.

📝 Form 5405 for Credit Repayment

Form 5405 is crucial for those who claimed the first-time homebuyer credit. It is used to notify the IRS if the home is no longer your main home, and to calculate the repayment amount with your tax return.

🖥️ Electronic Application for Historic Preservation Tax Credits

The application process for the Historic Preservation Tax Credit is now fully electronic. Applicants must use the current application forms and instructions dated "(Rev. 6/2023)".

Hard copy applications are not accepted.

📌 Key Points Summary

  • The first-time homebuyer credit is no longer available for new purchases.
  • Historic rehabilitation investment totaled about $9.6 billion in 2025.
  • Use Form 5405 for notifying the IRS about home credit repayment.
  • Historic Preservation Tax Credit applications must be filed electronically.
  • Economic benefits include job creation and GDP contributions.

💡 Tips for First-Time Home Buyers

Review the details of your situation with an attorney to ensure compliance with current laws.

🏡 Understand Deadlines

The first-time homebuyer tax credit is not available for new claims. Ensure you know the historical deadline of December 31, 2008, for any related claims.

📝 Keep Documentation

If you previously claimed the first-time homebuyer credit, maintain records of your original purchase and any related forms. This will be necessary for future tax filings.

🖥️ Utilize Electronic Resources

For applying for historic preservation tax credits, use the fully electronic application process. It’s efficient and ensures your application is processed promptly.

📊 Know the Economic Impact

Understand the benefits of the Historic Preservation Tax Credit. It supports economic growth and job creation, which can indirectly benefit your property values.

📌 Explore Assistance Options

The Taxpayer Advocate Service can help if you’re filing your federal income tax return for the first time. They provide useful resources and guidance.

🏆 Services Ranked by User Reviews (2026)

This section highlights services that may assist with tax preparation and related needs. The order follows Trustpilot data checked in October 2026. Scores can change over time, and star ratings are just one aspect to consider.

Users often share more negative experiences, which can affect the overall score.

🥇 1. Credit Repair Cloud

Credit Repair Cloud has been rated 4.8. It is known for its credit repair business software and training support for entrepreneurs in this field. However, it primarily serves businesses rather than individual consumers, which may limit its usefulness for personal tax matters.

🥈 2. TaxSlayer

TaxSlayer holds a score of 4.2. This service is recognized for its tax preparation software and federal and state e-filing services. Some users report issues with customer support responsiveness, which is something to consider when seeking assistance.

🥉 3. CreditRepair.com

CreditRepair.com has a lower Trustpilot score of 1.2. It offers credit repair services and credit score improvement assistance. Many reviewers express dissatisfaction with billing practices and customer service, which may affect user experiences negatively.

4️⃣ Credit.com

Credit.com has a Trustpilot score of 1.7. It is known for credit score monitoring and providing credit advice. However, a significant number of reviews highlight concerns about billing issues and customer support, indicating potential challenges for users.

🆓 Free Assistance Options

The Taxpayer Advocate Service offers free assistance for individuals filing a federal income tax return for the first time. They provide guidance and resources to help navigate the tax process.

🔎 What to Compare When Choosing Services

  • 📈 User ratings and reviews
  • 👥 Customer service quality
  • 💻 Availability of online resources
  • 📑 Range of services offered
  • 💰 Costs and fees involved

❓ Frequently Asked Questions

🤔 What is the First-Time Homebuyer Credit?

The First-Time Homebuyer Credit was a tax credit available for homes purchased between April 9, 2008, and December 31, 2008. It allowed eligible buyers to receive a refundable credit of up to $7,500 or 10% of the home’s purchase price.

📅 Are there any current tax credits for first-time homebuyers?

Currently, there are no tax credits available for first-time homebuyers. The previous credit expired on December 31, 2008, and there have been no new provisions since then.

🏛️ What is the Historic Preservation Tax Credit?

The Historic Preservation Tax Credit offers a 20% tax credit for the rehabilitation of properties used for income-producing purposes. This credit does not apply to owner-occupied residential properties.

📝 How do I apply for the Historic Preservation Tax Credit?

The application process for the Historic Preservation Tax Credit is done entirely online. Applicants must use the current electronic forms, as hard copy applications are not accepted.

💡 What resources are available for first-time filers?

The Taxpayer Advocate Service provides valuable resources and guidance for individuals filing their federal income tax return for the first time. They can assist with various tax-related questions and concerns.

📊 What is the economic impact of Historic Preservation Tax Credits?

In fiscal year 2025, private investment in historic rehabilitation projects reached about $9.6 billion, creating approximately 163,000 jobs and contributing around $9.2 billion to the U.S. GDP. This demonstrates the significant economic benefits of such tax incentives.

⚖️ Recent Court Cases Related to Homebuyer Tax Credits

Recent court rulings have clarified various aspects of tax credits related to home buying and rehabilitation. These rulings can affect how previous credits are applied or repaid.

For more recent rulings, feel free to check more rulings on the news page.

End of October 2026 Update





The First Time Home Buyer Tax Credit: An Overview

Purchasing a home for the first time can be a daunting experience. As a first-time homebuyer, you might have many important questions such as ""How much should I pay for a down payment?"" or ""What is the best mortgage for me?"" One factor that might help in the decision-making process is the first-time homebuyer tax credit.

The first-time homebuyer tax credit was initially introduced in 2008 by the U.S. government to help stimulate the economy and to encourage first-time homebuyers to purchase homes. The credit was extended in 2009 and then again in 2010. In this article, we will discuss the basics of the first-time homebuyer tax credit and how it works.

What is the First Time Home Buyer Tax Credit?

First Time Home Buyer Tax Credit

The first-time homebuyer tax credit is a credit that first-time homebuyers can apply for when they buy their first home. The credit applies to the purchase of a primary residence and can only be claimed once. The credit is intended to help with the upfront costs of purchasing a home, such as a down payment or closing costs.

The credit was introduced in 2008 and gives first-time homebuyers a credit of up to $7,500 or 10% of the purchase price of the home, whichever is less. The credit was initially set to expire in 2009 but was extended to 2010.

In 2010, the credit was extended again and expanded to include move-up buyers. Move-up buyers were defined as those who already owned a primary residence and were looking to purchase a new primary residence. The credit for move-up buyers was $6,500 or 10% of the purchase price of the new home, whichever is less.

Who Qualifies for the First Time Home Buyer Tax Credit?

To qualify for the first-time homebuyer tax credit, you must meet certain eligibility criteria. The most important eligibility criteria are:

1. You must be a first-time homebuyer or a move-up buyer.

2. You must have purchased a primary residence.

3. You must have purchased the home between the specified dates.

4. You must meet certain income requirements.

5. You must not have owned a home in the three years before the purchase of the new home.

First-time homebuyers are defined as those who have not owned a home in the three years before the purchase of the new home. Move-up buyers are defined as those who already own a primary residence and are looking to purchase a new primary residence.

To qualify for the credit, you must have purchased a primary residence. A primary residence is the home where you live most of the time. You cannot claim the credit for a vacation home or investment property.

The credit is only available to those who purchased a home between the specified dates. For the initial credit, you must have purchased a home between April 9, 2008, and July 1, 2009. For the extended credit, you must have purchased a home between November 30, 2009, and April 30, 2010. The credit for move-up buyers was also extended to April 30, 2010.

To qualify for the credit, you must also meet certain income requirements. The income limit for the initial credit was $75,000 for single taxpayers and $150,000 for married taxpayers filing jointly. The income limit for the extended credit was $125,000 for single taxpayers and $225,000 for married taxpayers filing jointly.

How to Claim the First Time Home Buyer Tax Credit

To claim the first-time homebuyer tax credit, you must file Form 5405 with your tax return. The form requires the following information:

1. Your name and Social Security number.

2. The address of the home you purchased.

3. The date you closed on the home.

4. The purchase price of the home.

5. The amount of the credit you are claiming.

You also need to attach a of your settlement statement, also known as the HUD-1, to the form. The settlement statement provides details such as the purchase price of the home, the amount of your down payment, and any closing costs you paid.

If you are claiming the extended credit for move-up buyers, you must also provide proof that you owned and lived in your previous primary residence for at least five years out of the eight years before the purchase of the new home.

When Can You Claim the First Time Home Buyer Tax Credit?

You can claim the first-time homebuyer tax credit when you file your tax return for the year in which you purchased the home. For example, if you purchased a home in 2020, you would claim the credit when you file your tax return for 2020.

If you purchased a home in 2008 and claimed the credit, you must repay the credit over 15 years beginning with the 2010 tax year. The credit is repaid as an additional tax on your tax return each year until the credit is fully repaid.

The credit for move-up buyers does not have to be repaid unless you sell the new home within three years of the purchase.

Tips for First-Time Homebuyers

As a first-time homebuyer, you might find the process of purchasing a home overwhelming. Here are some tips to help:

1. Do your research. Research the homebuying process, different types of mortgages, and neighborhoods that fit your needs and budget.

2. Get pre-approved for a loan. Getting pre-approved for a loan can give you an idea of the amount you can borrow and help you to narrow your search.

3. Know your budget. Determine how much you can comfortably afford to pay each month for your mortgage, insurance, and other expenses.

4. Work with a real estate agent. A real estate agent can help you find homes that meet your needs and budget and guide you through the purchasing process.

5. Get a home inspection. A home inspection can help identify any potential issues with the home before you purchase it.

6. Don't rush. Take your time and don't rush into making a decision. Purchasing a home is a big investment and it's important to make the right decision.

📝 See Also

Conclusion

The first-time homebuyer tax credit was introduced by the U.S. government to help stimulate the economy and encourage first-time homebuyers to purchase homes. The credit applies to the purchase of a primary residence and can only be claimed once. To qualify for the credit, you must meet certain eligibility criteria and file Form 5405 with your tax return. As a first-time homebuyer, it's important to research the home-buying process, know your budget, and work with a real estate agent to find the right home for you.

What Happened To the First Time Home Buyer Tax Credit?
One of the biggest ever federal incentives for people new to home ownership, the first time home buyer tax credit was a program created in 2008 under the Bush administration.  This tax credit gave new homeowners up to $7500 or 10 percent of the purchase price, whichever was lower.  However, no new filers will be able to claim the first time home buyer tax credit in 2012.  What happened to the credit, and why isn't it being brought back with foreclosure rates still high and interest rates still low?  We'll take a look in this brief guide.

When Was the First Time Home Buyer Tax Credit Available?

People buying homes for the first time in 2008-2010 were able to take advantage of the first time home buyer tax credit.  This tax credit was created in order to stimulate home ownership in the United States after housing prices collapsed.

For a very small number of families, purchases made in 2011 also qualified for the first time home buyer tax credit.  Some military and intelligence community members were also allowed to include purchases made in 2011, because some of them may have been enlisted at the time when the credits were available for first time homebuyers.

Triggers for Repaying your First Time Home Buyer Tax Credit

You may have to repay the tax credit if you sell your home or no longer consider the home your primary residence depending on the year you received the tax credit in the first place.  Repayment scenarios are provided below:

Bought Home in 2008 and Received First Time Home Buyer Tax Credit

If you sell the home to a related party in the next 15 years after you bought the home, you need to repay the full credit minus any amount you already repaid.  Complete Form 5405 and attach the form to your federal tax return for the year the home was sold.  The repayment is required even if you suffered a loss on the property.

Bought Home in 2009 or 2010 and Received First Time Home Buyer Tax Credit

If you sold the house to a related party within 36 months of buying the house, you need to repay the full tax credit.  Complete Form 5405 and attach the completed form to your federal tax return for the year you sold the home.  The repayment will either increase the taxes you owe or reduce your refund.

Bought Home in 2008, 2009, or 2010 and the Home was Destroyed or Condemned

If the home was destroyed or condemned and you did not replace, rebuild, or buy a new home within two years, you need to repay the full First Time Home Buyer Tax Credit.  Complete Form 5405 and attach the form to your federal tax return for the year the two-year grace period ends.  You’ll have to complete Form 5405 and attach it to your federal tax return to during the year of the destruction or condemnation in order to report the damage as well.

Bought Home in 2008, 2009, or 2010 and Converted Home to Business or Rental Property

If you converted the home to a business or rental property, you need to repay the unpaid balance of the First Time Home Buyer Tax Credit.  Complete Form 5405 and attach the form to the federal tax return for the year the home was converted to a rental or business property.

Why Did the Tax Credit Expire?

While the first time home buyer tax credit was a good benefit for people who could already afford to purchase a house, the fact that it took until taxes were due to receive the benefit made it less useful for people who had trouble putting together a down payment.  The credit had to be repaid if you sold the house before it was paid off if you purchased a house in 2008, a major hassle for any buyer and one that may cause problems for some taxpayers for years to come.  In 2009 these restrictions were lifted and the credits no longer need to be repaid.

Initially, the tax credit was extended in the Worker, Home Ownership, and Business Assistance Act of 2009.  Not only was it extended in duration to include homes bought in 2009 and 2010, but it also expanded income limits for the credits and allowed a credit of up to $6500 for people buying a home who were not first time homebuyers.

Will There Be Another First Time Home Buyers Tax Credit?

The problem with the tax credit was simply that it didn't do enough to stem the tide of foreclosures and stimulate the housing market.  The credit ignored the economic realities for most first time homebuyers and focused too much on giving a tax payment rather than making credit or down payment assistance available for people affected by the recession.

Today, there is no one in Congress seriously proposing that these tax credits be re-established.  Without credit being made available by banks and an improvement to the problems of underemployment and unemployment, the tax credit was benefiting few people and was not making a significant impact on housing prices or foreclosure rates.

Questions about the Tax Credit

If you have any questions about the tax credit for your home, you can call (800) 919-0352.  You can also consult with a tax return preparer and have them contact the IRS if needed.