Longtime Homebuyer Tax Credit

AAA

DEFINITION of 'Longtime Homebuyer Tax Credit'

The Longtime Homebuyer Tax Credit was a federal income tax credit available to homebuyers who had owned and lived in the same principal residence for five of the last eight years before the purchase of their next home. In order to qualify for the credit, most homebuyers would have had to sign a binding sales contract for the home before April 30, 2010 and close on the purchase before June 30, 2010.

INVESTOPEDIA EXPLAINS 'Longtime Homebuyer Tax Credit'

The homebuyer tax credits were designed to bring new buyers to the housing market and increase demand in order to stabilize falling housing prices. By most accounts, the credits were successful in increasing home sales and median prices. Critics of the tax credit believe that this subsidy artificially inflates home prices and that it acts as only a temporary support for falling prices.

VIDEO

RELATED TERMS
  1. Tax Deduction

    A deduction from gross income that arises due to various types ...
  2. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
  3. Tax Shelter

    A legal method of minimizing or decreasing an investor's taxable ...
  4. Refundable Credit

    A tax credit that is not limited by the amount of an individual's ...
  5. Tax Freedom Day

    The day that the average American has earned enough money (in ...
  6. Buffett Rule

    A tax rule proposed in 2011, by President Barack Obama, stating ...
Related Articles
  1. 10 Steps To Tax Preparation
    Taxes

    10 Steps To Tax Preparation

  2. Getting A Job As The Tax Man
    Insurance

    Getting A Job As The Tax Man

  3. Tax Deductions Vs. Tax Credits
    Taxes

    Tax Deductions Vs. Tax Credits

  4. 5 Tax Credits You Shouldn't Miss
    Taxes

    5 Tax Credits You Shouldn't Miss

comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
Trading Center