First-Time Homebuyer Credit
The first-time homebuyer tax credit is a special tax break available to qualified taxpayers who purchased a primary residence between April 9, 2008 and September 30, 2010.
The amount of the credit and the requirements for eligibility vary from year-to-year.
For 2008, the credit was worth up to $7,500, but must be repaid in 15 equal, annual installments. In this respect it functions more like an interest-free loan than a traditional tax credit.
For 2009 and 2010, the amount was increased to $8,000 and does not have to be paid back.
For 2011, only members of the uniformed or foreign service, and employees of the intelligence community with extended duty outside of the country of at least 90 days between Dec 31, 2008 and May 1, 2010 are eligible for the credit.
The credit is refundable and, depending on your tax liability, will either decrease the amount of tax you owe or increase your refund.