The homebuyer tax credit has changed dramatically when viewed from the original version enacted by Congress in 2008. To date, there have been three versions of the federal homebuyer tax credit, each with significant changes made when compared to the prior versions.
The Housing and Economic Recovery Act of 2008 was enacted by Congress to help revitalize the struggling housing industry. This first version of the tax credit wasn't actually a tax credit. The original version was a long term, interest-free loan that had to be paid back over a period of 15 years. Originally the credit/loan was valued at an amount up to a maximum of $7,500 for first-time homebuyers purchasing a primary residence between April 9, 2008, and June 30, 2009.
In the second version, the tax credit became an actual tax credit, in the sense that there was no longer a requirement to repay the money as long as certain guidelines were followed. Not only was the second version a true credit, the maximum value of the credit obtainable was increased to $8,000 for first-time homebuyers purchasing a primary residence between January 1, 2009, and November 30, 2009.
The current version of the tax credit was signed into law on November 6, 2009. The Worker, Homeownership and Business Assistance Act of 2009 extended and expanded on the previous homebuyer tax credit acts. Under the current version, first-time homebuyers may still claim 10% of the purchase price of the home up to a maximum of $8,000; however, the current version has been expanded to include existing homeowners as well. An existing homeowner is defined as a resident who has owned and used the home as a primary residence for at least five consecutive years out of an eight year period ending on the purchase date of the new home. The new home must be purchased as a primary residence and an existing homeowner may claim 10% of the purchase price of the home up to a maximum credit amount of $6,500.
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