**No longer available for the 2012 tax year and beyond**
Note: Only eligible Military Members and certain other federal employees serving outside the U.S. have additional time to buy a principal residence in the U.S. and qualify for this credit in 2011.
Only the purchase of a main home located in the United States qualifies and only for a limited time. Vacation homes and rental property are not eligible. You must buy the home after April 8, 2008, and enter into a binding contract before May 1, 2010 and close before before October 1, 2010. For a home that you construct, the purchase date is the first date you occupy the home.
If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return. However, if you purchased the home after November 6, 2009, you must claim the credit with your 2009 return using the NEW Form 5405. For an eligible purchase in 2010, you can choose to claim the credit on either your 2009 or 2010 return. All 2009 returns with Form 5405 (claim for First Time Homebuyers Credit) attached will not be accepted by electronic filing. You must print and file the return by mail.
Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit. However, as of November 6, 2009, new legislation provides first time, long-time homeowners who buy a replacement principal residence may also claim a homebuyer credit of up to $6,500 (up to $3,250 for a married individual filing separately). They must have lived in the same principal residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.