HOUSING AND ECONOMIC RECOVERY ACT OF 2008
First-Time Homebuyer Tax Credit

FEATURE

H. R. 3221
Housing and Economic Recovery Act of 2008

Amount of Credit

Ten percent of cost of home, not to exceed
$7,500.

Eligible Property

Any single-family residence (including condos, co-
ops) that will be used as a principal residence.

Refundable

Yes. Reduces income tax liability for the year of
purchase. Claimed on tax return for that tax year.

Income Limit

Yes. Full amount of credit available for individuals
with adjusted gross income of no more than
$75,000 ($150,000 on a joint return). Phases out
above those caps ($95,000 and $170,000 respectively).

First-Time Homebuyer Only

Yes. Purchaser (and purchaser’s spouse) may not
have owned a pricipal residence in the 3 years
previous to purchase.

Recapture — CAUTION!!

Yes. Portion (6.67% of credit) to be repaid each
year for 15 years. If home is sold before 15 years,
then remainder of credit is recaptured on sale.

Impact of District of Columbia
Homebuyer Credit

DC credit not available if purchaser uses this credit.

Effective Date

Purchases on or after April 9, 2008

Termination

July 1, 2009

Interaction with Alternative
Minimum Tax (AMT)

Can be used against AMT, so credit will not throw
individuals into AMT.