Homebuyer Tax Credit

Eligible first-time homebuyer tax credit is equal to 10 percent of the cost of a home up to $8,000 (or $4,000 for a married individual filing separately).

For long-time homeowners, the credit is equal to 10 percent of the purchase price up to $6,500 (or $3,250 for a married individual filing separately).

Eligible taxpayers must buy or enter into a binding contract to buy a principle residence on or before April 30, 2010 and close on the home by June 30, 2010

The law defines a first-time homebuyer is an individual who has not owned a home in the three years prior to the day of purchase. According to the IRS, the long-time homeowner must have lived in the same principle residence for any five-consecutive year period during the eight-year period that ended on the date the replacement home is purchased.