$6,500 Home Buyer Tax Credit

IMPORTANT: This article applies to a tax credit in 2009 and 2010 that has now expired. Use this information for historical purposes only. The information here does NOT apply to current tax years.

Good news for prospective home-buyers: It looks like Congress will extend the $8,000 first-time home buyer tax credit that was slated to end this month and add a $6,500 tax credit for those that have already owned a home.

The Senate voted 98-0 Wednesday to extend and expand the tax credit and the House could vote on the bill as early as today. If passed, the $8,000 tax credit would remain in effect for first-time home buyers — or anyone who hasn’t owned a home in the last three years.

Buyers who have owned their current homes at least five years would also now be eligible for tax credits of up to $6,500. To claim the credit, both groups of buyers would have to sign purchase agreements before April 30, 2010 and close before June 30. The tax credit would be extended until June 30, 2011 for servicemen and women serving overseas for at least 90 days.

The actual credit amount home buyers are eligible for is ten percent of their home purchase price up to a maximum of $8,000 for first-time home buyers and $6,500 for buyers who already own homes.

Who is Eligible for the Tax Credit?

To qualify for either credit, you must be purchasing a primary residence of less than $800,000 and cannot be purchasing the property from a direct relative.

You are eligible for the first-time home buyer tax credit if you:

  • Have never owned a home
  • Have not owned your primary residence for the last least three years

You are eligible for the $6,500 home buyer tax credit if you have lived in a home you own for five consecutive years out of the last eight years. Unfortunately, it does look like these new provisions still exclude some buyers from the credit. Buyers who have owned a home within the last three years, but did not own it for at least five years, cannot take the new credit.

Income Limits

The amount of the tax credit you can claim will be phased out for single taxpayers who earn more than $125,000 and joint taxpayers who earn more than $225,000.

Want FREE help eliminating debt & saving your first (or next) $100,000?

Money Under 30 has everything you need to know about money, written by real people who've been there. Enter your email to receive our free weekly newsletter and MoneySchool, our free 7-day course that will help you make immediate progress on whatever money challenge you're facing right now.

We'll never spam you and offer one-click unsubscribe, always.

About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.


  1. I purchased my home in 2005 but as of 2008 my mortage company was in a lawsuit,now my house went in forclosure in the same year what tax credit can I get if any.

  2. We owned a home for 21 years, sold it 7/31/05 and bought another 8/1/05 when transferred. We lived in that house until 10/31/08. We bought a new house 1/12/10. Since we lived in and owned a home for the past 24 years, do we qualify for the $6500 new home credit even if the owned home wasn’t the same address?

  3. I too bought in 20005 when mortgage companies falsely inflated the market by lending too much to anybody. They got bailed out. Now being relocated, I have to lose around $100,000 but they credit is for those who bought before this time, can sell low and still make a profit. This only contributes to bringing the market further down.

  4. I have a question –
    We owned our previous home for about 45 days shy of 5 years. We owned our home prior to that one for 4 years. Both homes were primary residences.
    The $6500 tax credit restrictions say you had to have owned and lived in your primary residence for 5 of the last 8 years. So does it have to be the same home, or can it be split between 2 homes?
    We just bought a new house and would qualify for the credit as long as it didn’t have to be the same home for 5 years (banging my head for not delaying our sale of the last home by 45 days!).

  5. I purchased my first home in 2008 and was told I can get a $6,500. interest free pay back in 15 years loan. The following year the government offered an $8,000.00 first time home buyer, no interest, no pay back credit. Is the no payback going to apply to 2008 first time home buyers who have to fix the bathroom the kitchen and other odds and ends inside and out with a limited income?

  6. We sold our home in 2008 and started leasing. Are we eligible? It has been not quite two years.

  7. Judy Huebner says:

    i should have added
    if i don’t sell it or get an offer by April 30th and close by June 30th

  8. Judy Huebner says:

    what if i put my home on the market and i buy another home but my home doesn’t sell
    can i still buy the new home, get the tax credit if i haven’t sold my primary home

  9. Do you have to have lived in the same house for 5 years? or been a constant homeowner for 5 years? We sold and bought a new house in 2006,

  10. We sold a home and purchased a new one on 10/28/09, just 8 days before the 11/6/09 change for move-up home buyers. Is there anyway to request an exception? If we had known in October about the pending change, we would have delayed closing until after 11/6!

  11. William A. Little says:

    I purchased a new home February 14, 2004. Please answer the following questions:
    1. Is there a document that I should file to obtain this $6,500 dollar credit?
    2. Should this document be filed with my 2009 tax return in order to receive this credit.
    3. After applying for this credit, does the government simply write me a check for $6,500 notwithstanding questions 1 and 2 above?

  12. I purchased my home in Nov. 2006. I still live in the same home. Does anyone know if I qualify for the 6500 credit?

  13. The tax credit is mainly focusing on first time home owners to encourage them to get mortgages (payable mortgages so they don’t go bankrupt) and get the housing market going again. The government knows that they should help the recently new/changed home owners as they too have put more investment as well.

  14. Purchased my home March 2008 and i guess I don’t qualify for anything as well. This sucks, what is the big deal to the boarder dates anyway? What happen to 1 January to 31 December. This has to be reworked.

  15. Redundent I’m sure. We purchased our new home in 1/08, after selling our home which we lived in for 8 years. Do we qualify for anything (hopefully the $6,500 credit)?

  16. I live in a appartment since february 2004 which then bought it as a condo in November 2005. Would I be able to qualify for the $6500 credit, since I’ve technically lived there for more than 5 years. I’ve just bought a new house with my wife in November 18.

  17. Can anyone answer my question. I bought my home in Dec 10 2007, that mean I don’t qualify for any of the taxcredit?

  18. Oops, forgot to check box below to get an answer via email about where to find the purchase agreement to sign.

  19. Where do you get the purchase agreement that needs signed?

  20. I have a question of eligibility regarding the $6,500 “move up” home buyer tax credit.

    I closed on my home on 12/31/03 and it is our primary residence. Last year I decided to sell my house when I found out a Registered Sex Offender was relocated next door. As a single mother of a nine year old I temporarily moved in with friend in July of 2008. This also gave me an opportunity to renovate the house in order to sell it. My mail was also forwarded to my friends address during this time.

    We moved back to the house in June of 2009 when the work was completed and learned that the Sex Offender was sent back to prison. We are presently residing there full time now.

    I did not rent the house and continued to pay the mortgage, utilities and taxes on the property during the entire time. I also spent most weekends and various other times at the house doing the renovations.

    Will this time I spent at my friends house exclude me from the $6,500 tax credit? As a single parent with a low income this tax credit would be very important to me.

    Thank you,

    • You are qualified, I believe.
      You pay mortgage, tax and never claim other houses as your primary residency, you are ok. Don’t worry.

  21. So what’s the answer on the $6500 credit, we just purchased our home in July of this year, I had previously owned my home for over 6 years. Am I not eligible for the $6500 credit?

    • No. You are not qualified for $6500.
      You need to purchase the house after Nov 6, 2009.

    • Same thing happened to us. I think the credit should at least work for homes bought in 2009. This sucks. Guess it is another way for the government to control us.

  22. Is there any one who can help I can’t find this answer anywhere. We just sold our home which we lived in for 5 years and 6 months. Can my in-laws cosign if my wife and I are a not first time home buyers but in the (Move-up repeat home buyer) tax credit bracket?? I realize that the First time home buyer credit applies with a cosign but what about our situation being the Move-up repeat home buyer $6,500 tax credit? Thanks in advance for responding to this question as we sign and cosign this week and want to make sure we are still eligible for the full credit with a cosign. And yes, we would be the Only residents of the home.

  23. I love the US government. The harder you work for money and a home the less they give you.

  24. Does building a home count or does it have to be one you buy off of the market?

  25. Grayce,

    I agree. I bought just over 4 years ago and I thought about buying again. But I don’t qualify for the 5 year mark by only a few months. This was not well thought out.

  26. I purchased my first home on March 20, 2008 so I guess i’m out of luck with sucks really bad. They need to rework this to include more people!!!!!!

  27. Good news! Let the free money rain down us all :)

    Nice guest post on Brian’s site btw. I responded.


  28. Anna Winans says:

    So, the $6500 will not apply to us…we sold a home (closed on September 25) and bought the home we live in right now (that closed on 10/30), so I assume this new tax credit will not apply to us since we already sold our home (that we lived in for 20 years) and JUST closed on the one we purchased…

    • I am in the same scenario.. owned my previous home for last 15 yrs and bought 2nd home n closed in March2009. I guess we’re just out of luck!!

Speak Your Mind