Tax year 2024 was the last year Form 5405 was supported. Tax years 2025, 2026, and later do not support Form 5405 or First-Time Homebuyer Credit reporting.
This article is provided for informational purposes and primarily applies to homes purchased during 2008, 2009, and 2010, when the First-Time Homebuyer Credit was available.
How Did the First-Time Homebuyer Credit Work?
The First-Time Homebuyer Credit was a temporary federal tax credit that:
- Applied to qualifying home purchases made between April 9, 2008, and April 30, 2010.
- Reduced a taxpayer's tax liability dollar for dollar.
- Was refundable, meaning eligible taxpayers could receive the credit even if they owed no tax.
- Was claimed on Form 5405, First-Time Homebuyer Credit.
Only a principal residence located in the United States qualified for the credit. Vacation homes and rental properties did not qualify.
Who Qualified as a First-Time Homebuyer?
Generally, you were considered a first-time homebuyer if you had not owned a principal residence during the three-year period ending on the purchase date of the new home.
How Much Was the Credit?
The credit was generally equal to 10% of the purchase price of the home, subject to the following limits:
| Purchase Year | Maximum Credit | Married Filing Separately |
|---|---|---|
| 2008 | $7,500 | $3,750 |
| 2009 & 2010 | $8,000 | $4,000 |
In most cases, the full credit was available for homes costing at least $75,000 (or $80,000 for homes purchased in 2009 or 2010).
Did the Credit Have to Be Repaid?
Homes Purchased in 2008
For homes purchased in 2008, the credit generally functioned as an interest-free loan and had to be repaid over 15 years.
For example, a taxpayer who claimed the maximum $7,500 credit typically repaid:
- $500 per year
- Beginning with the 2010 tax return
- Continuing for 15 years unless an event accelerated repayment
Homes Purchased in 2009 or 2010
For homes purchased in 2009 or 2010, repayment was generally not required as long as the home remained your main residence.
However, repayment could be required if the home stopped being your principal residence within the 36-month period beginning on the purchase date.
Examples include:
- Selling the home
- Converting the home to a rental property
- Foreclosure
- Transfer of ownership
- Any other event causing the home to cease being your main home
What Were the Income Limits?
The credit was phased out for higher-income taxpayers.
Homes Purchased Before November 7, 2009
| Filing Status | Phaseout Begins | Fully Phased Out |
|---|---|---|
| Married Filing Jointly | $150,000 | $170,000 |
| All Other Filers | $75,000 | $95,000 |
Homes Purchased After November 6, 2009
| Filing Status | Phaseout Begins | Fully Phased Out |
|---|---|---|
| Married Filing Jointly | $225,000 | $245,000 |
| All Other Filers | $125,000 | $145,000 |
Special Rule for Certain Military Members and Federal Employees
Certain military members and qualifying federal employees serving outside the United States were granted additional time to purchase a principal residence and qualify for the credit under special rules that applied through 2011.
Can I Still Claim the First-Time Homebuyer Credit?
The First-Time Homebuyer Credit expired years ago and is no longer available for new home purchases.
Additionally, tax year 2024 was the final year Form 5405 was supported. Tax years 2025, 2026, and later do not support Form 5405 or any First-Time Homebuyer Credit reporting.
What If I Need Information About a Prior Credit Claim?
If you previously claimed the First-Time Homebuyer Credit and need information about:
- The original credit amount
- Prior repayments
- Any remaining balance
you'll need to review your personal records, such as:
- Prior-year tax returns
- Copies of Form 5405
- IRS notices or correspondence related to the credit
- Other tax documents showing prior repayments
The IRS First-Time Homebuyer Credit Account Look-Up tool is no longer available.
What Else Should I Know?
The First-Time Homebuyer Credit provided significant tax benefits to eligible taxpayers who purchased homes during 2008 through 2010. While the credit is no longer available and Form 5405 is no longer supported after tax year 2024, understanding the original rules can help taxpayers review prior filings, repayment history, or amended returns related to the credit.