Homebuyer Credit

The federal government wants to encourage home ownership. Toward this end, from time to time, it has provided a tax credit to new buyers. There are two tax credits: (1) a credit for first-time homebuyers in the District of Columbia and (2) a refundable tax credit for first-time homebuyers anywhere.

The DC homebuyer credit is the purchase price of the home (one-half if married filing separately) but no more than $5,000 ($2,000 for married filings separately). The first-time homebuyer credit is a refundable credit of 10 percent of the purchase price for a home bought after April 9, 2008, and before December 1, 2009, but no more than $8,000 ($4,000 for married filing separately) for homes purchased in the first 11 months of 2009. For this credit title to the home must pass within the first 11 months of 2009; it is not sufficient that you go to contract in this period.