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.
BREAKING DOWN '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.