Note: For taxpayers who claimed the 2008 First-Time Homebuyer Credit, the final required annual repayment was generally made with the 2024 tax return; therefore, no regular repayment is typically required for tax year 2025 or later.
If you claimed the First-Time Homebuyer Credit for a home purchased in 2008, you may be required to repay the remaining balance of that credit if the home was disposed of or stopped being your main home. In many cases, a disposition triggers repayment of the unpaid portion of the credit. If the event occurred in a prior tax year and wasn't reported, you may need to amend that year's tax return.
When Is a Home Considered Disposed Of?
- You sold the home.
- The home was lost through foreclosure.
- The property was converted to a rental property.
- The property was converted to business use.
- The home was abandoned (and the abandonment was not connected to a sale or foreclosure).
Exceptions to the Repayment Rules
- The home was condemned, destroyed, or disposed of under threat of condemnation.
- The home was transferred to a spouse or former spouse as part of a divorce settlement.
- The taxpayer who claimed the credit died during the tax year.
What If You Didn't Report the Disposition?
If you already filed your tax return and did not report the disposition of the home, you should amend the return for the year in which the disposition occurred.
When filing the amended return:
- Complete Form 5405, Repayment of the First-Time Homebuyer Credit.
- Include the form with the amended return for the appropriate tax year.
- Report any repayment amount required under the IRS rules.