If you are a first-time homebuyer, you may qualify for a one-time tax credit. This tax credit functions as an interest-free loan that you must repay over a 15-year period. You and your spouse are considered first-time homebuyers if you purchased your home in the United States between certain dates specified by the Internal Revenue Service (IRS).  Part of these qualifications state that you and your spouse did not own any other main home during the three-year period ending on the date you purchased your new home. If you built your new home, the purchase date is the date you first occupied the house.

A new home may be a:

--          House

--          Condominium

--          Cooperative Apartment

--          Mobile Home

--          Houseboat

--          House trailer

You cannot claim the first-time homebuyer tax credit if:

--          your modified adjusted gross income (AGI) is above a specified level.

--          you are eligible to claim the District of Columbia first-time homebuyer credit.

--          your home financing comes from tax-exempt mortgage revenue bonds.

--          you and your spouse are nonresident aliens.

--          you sell your home or it ceases to be your main home before the end of the tax year.

--          your home was a gift or an inheritance.

--          you acquired the home from a relative.

If you are a low-income taxpayer, you may also qualify for the mortgage interest credit if you were issued a mortgage credit certificate (MCC) by your state or local government. If you qualify, each year you can claim the credit for a portion of the mortgage interest that you paid.

You can claim your first-time homebuyer tax credit on Form 5405 (PDF). You can find more information about the new homebuyer tax credit in IRS Publication 530, Tax Information for Homeowners (PDF).