First-Time Home Buyer Defined

The Internal Revenue Service offers tax benefits for first-time home buyers. However, the IRS does not always use the same definition of what constitutes a "first-time home buyer" for all benefits.

Home Buyer Tax Credit

For the first-time home buyer tax credit, you cannot have owned a home for three years prior to buying the new home, according to the IRS. For example, if you bought a home on June 1, 2009, you could qualify as a first-time home buyer if you had not owned a home since June 2, 2006. In order to claim this tax credit, your modified adjusted gross income must fall below the annual limit, which varies based on your filing status; so, higher income taxpayers may not be eligible.

IRA Early Distirbutions

In order to qualify for the exemption from an early withdrawal penalty to use your individual retirement account funds for your first home purchase, you cannot have owned a home for the past two years, according to IRS Publication 590.

Warning

For the waiver of the early IRA distribution penalty, your spouse must also meet the requirements for being a first-time home buyer, as stated in IRS Publication 590.

References

• Internal Revenue Service: First-Time Homebuyer Credit Questions and Answers: Basic Information
• Internal Revenue Service: Publication 590 - Early Distributions