The First-Time Home Buyer Tax Credit

Biden’s “First Down Payment Tax Credit,” if implemented, would create a permanent, refundable tax credit for first-time buyers. First-time buyers are defined by the federal government as people who have not owned a residence within the previous three years.

The bill will create a refundable tax credit worth up to 10% of the purchase price, or $15,000. Taxpayers can choose to treat the purchase of their home as occurring in the prior taxable year to receive the credit sooner.  

As home prices and demand continue to rise locally and nationally to unrivaled levels, the tax break proposal is set to counter the country's affordability crisis by motivating first-time homebuyers, specifically those in low to middle income earners.

In order to be eligible for the full credit you must meet all of following requirements:

  • Buyers cannot have owned or purchase a home within the past 3 years
  • Buyers must make no more than 160% of the area median income
  • Homes purchase price must be no more than 110% of the area median purchase price
  • Buyers must use the home as primary residence for at least 4 years, or face taxes to recover a portion of the the credit

Are you a first-time home buyer?

Check out all of these great resources from our home buyers guide.

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Posted by Kent Redding on
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