---
kind: "section"
citation: "26 U.S.C. § 36"
title: "26"
title_heading: "Internal Revenue Code"
number: "36"
heading: "First-time homebuyer credit"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/36"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter A — Determination of Tax Liability"
  - "Part IV — Credits Against Tax"
  - "Subpart C — Refundable Credits"
---

# §36. First-time homebuyer credit

- (a) **Allowance of credit—** In the case of an individual who is a first-time homebuyer of a principal residence in the [United States](/usc/26/993.md?p=g) during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the [purchase](/usc/26/1361.md?p=e-1-C) price of the residence.
- (b) **Limitations—**
  - (1) **Dollar limitation—**
    - (A) **In general—** Except as otherwise provided in this paragraph, the credit allowed under [subsection (a)](#a) shall not exceed $8,000.
    - (B) **Married individuals filing separately—** In the case of a married individual filing a separate return, [subparagraph (A)](#b-1-A) shall be applied by substituting “$4,000” for “$8,000”.
    - (C) **Other individuals—** If two or more individuals who are not married [purchase](/usc/26/1361.md?p=e-1-C) a principal residence, the amount of the credit allowed under [subsection (a)](#a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $8,000.
    - (D) **Special rule for long-time residents of same principal residence—** In the case of a [taxpayer](/usc/26/1313.md?p=b) to whom a credit under [subsection (a)](#a) is allowed by reason of [subsection (c)(6)](#c-6), subparagraphs [(A)](#b-1-A), [(B)](#b-1-B), and [(C)](#b-1-C) shall be applied by substituting “$6,500” for “$8,000” and “$3,250” for “$4,000”.
  - (2) **Limitation based on modified adjusted gross income—**
    - (A) **In general—** The amount allowable as a credit under [subsection (a)](#a) (determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so allowable as—
      - (i) the excess (if any) of—
        - (I) the [taxpayer](/usc/26/1313.md?p=b)’s modified [adjusted gross income](/usc/26/62.md?p=a) for such taxable year, over
        - (II) $125,000 ($225,000 in the case of a [joint return](/usc/26/62.md?p=b-3-D)), bears to
      - (ii) $20,000.
    - (B) **Modified adjusted gross income—** For purposes of [subparagraph (A)](#b-2-A), the term “modified [adjusted gross income](/usc/26/62.md?p=a)” means the [adjusted gross income](/usc/26/62.md?p=a) of the [taxpayer](/usc/26/1313.md?p=b) for the taxable year increased by any amount excluded from gross income under section [911](/usc/26/911.md), [931](/usc/26/931.md), or 933.
  - (3) **Limitation based on purchase price—** No credit shall be allowed under [subsection (a)](#a) for the [purchase](/usc/26/1361.md?p=e-1-C) of any residence if the [purchase](/usc/26/1361.md?p=e-1-C) price of such residence exceeds $800,000.
  - (4) **Age limitation—** No credit shall be allowed under [subsection (a)](#a) with respect to the [purchase](/usc/26/1361.md?p=e-1-C) of any residence unless the [taxpayer](/usc/26/1313.md?p=b) has attained age 18 as of the date of such [purchase](/usc/26/1361.md?p=e-1-C). In the case of any [taxpayer](/usc/26/1313.md?p=b) who is married (within the meaning of [section 7703](/usc/26/7703.md)), the [taxpayer](/usc/26/1313.md?p=b) shall be treated as meeting the age requirement of the preceding sentence if the [taxpayer](/usc/26/1313.md?p=b) or the [taxpayer](/usc/26/1313.md?p=b)’s spouse meets such age requirement.
- (c) **Definitions—** For purposes of this section—
  - (1) **First-time homebuyer—** The term “first-time homebuyer” means any individual if such individual (and if married, such individual’s spouse) had no present ownership [interest](/usc/26/856.md?p=f-1) in a principal residence during the 3-year period ending on the date of the [purchase](/usc/26/1361.md?p=e-1-C) of the principal residence to which this section applies.
  - (2) **Principal residence—** The term “principal residence” has the same meaning as when used in section 121.
  - (3) **Purchase—**
    - (A) **In general—** The term “[purchase](/usc/26/1361.md?p=e-1-C)” means any acquisition, but only if—
      - (i) the [property](/usc/26/317.md?p=a) is not acquired from a person related to the person acquiring such [property](/usc/26/317.md?p=a) (or, if married, such individual’s spouse), and
      - (ii) the basis of the [property](/usc/26/317.md?p=a) in the hands of the person acquiring such [property](/usc/26/317.md?p=a) is not determined—
        - (I) in whole or in part by reference to the adjusted basis of such [property](/usc/26/317.md?p=a) in the hands of the person from whom acquired, or
        - (II) under [section 1014(a)](/usc/26/1014.md?p=a) (relating to [property](/usc/26/317.md?p=a) acquired from a decedent).
    - (B) **Construction—** A residence which is constructed by the [taxpayer](/usc/26/1313.md?p=b) shall be treated as purchased by the [taxpayer](/usc/26/1313.md?p=b) on the date the [taxpayer](/usc/26/1313.md?p=b) first occupies such residence.
  - (4) **Purchase price—** The term “[purchase](/usc/26/1361.md?p=e-1-C) price” means the adjusted basis of the principal residence on the date such residence is purchased.
  - (5) **Related persons—** A person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section [267](/usc/26/267.md) or [707(b)](/usc/26/707.md?p=b) (but, in applying [section 267(b)](/usc/26/267.md?p=b) and (c) for purposes of this section, [paragraph (4)](/usc/26/267.md?p=c-4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants).
  - (6) **Exception for long-time residents of same principal residence—** In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the [purchase](/usc/26/1361.md?p=e-1-C) of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the [purchase](/usc/26/1361.md?p=e-1-C) of such subsequent residence.
- (d) **Exceptions—** No credit under [subsection (a)](#a) shall be allowed to any [taxpayer](/usc/26/1313.md?p=b) for any taxable year with respect to the [purchase](/usc/26/1361.md?p=e-1-C) of a residence if—
  - (1) the [taxpayer](/usc/26/1313.md?p=b) is a nonresident alien,
  - (2) the [taxpayer](/usc/26/1313.md?p=b) disposes of such residence (or such residence ceases to be the principal residence of the [taxpayer](/usc/26/1313.md?p=b) (and, if married, the [taxpayer](/usc/26/1313.md?p=b)’s spouse)) before the close of such taxable year,
  - (3) a deduction under [section 151](/usc/26/151.md) with respect to such [taxpayer](/usc/26/1313.md?p=b) is allowable to another [taxpayer](/usc/26/1313.md?p=b) for such taxable year, or
  - (4) the [taxpayer](/usc/26/1313.md?p=b) fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such [purchase](/usc/26/1361.md?p=e-1-C).
- (e) **Reporting—** If the Secretary requires information reporting under [section 6045](/usc/26/6045.md) by a person described in subsection (e)(2) thereof to verify the eligibility of [taxpayers](/usc/26/1313.md?p=b) for the credit allowable by this section, the exception provided by [section 6045(e)](/usc/26/6045.md?p=e) shall not apply.
- (f) **Recapture of credit—**
  - (1) **In general—** Except as otherwise provided in this subsection, if a credit under [subsection (a)](#a) is allowed to a [taxpayer](/usc/26/1313.md?p=b), the tax imposed by this chapter shall be increased by 6⅔ percent of the amount of such credit for each taxable year in the recapture period.
  - (2) **Acceleration of recapture—** If a [taxpayer](/usc/26/1313.md?p=b) disposes of the principal residence with respect to which a credit was allowed under [subsection (a)](#a) (or such residence ceases to be the principal residence of the [taxpayer](/usc/26/1313.md?p=b) (and, if married, the [taxpayer](/usc/26/1313.md?p=b)’s spouse)) before the end of the recapture period—
    - (A) the tax imposed by this chapter for the taxable year of such [disposition](/usc/26/424.md?p=c-1) or cessation shall be increased by the excess of the amount of the credit allowed over the amounts of tax imposed by [paragraph (1)](#f-1) for preceding taxable years, and
    - (B) [paragraph (1)](#f-1) shall not apply with respect to such credit for such taxable year or any subsequent taxable year.
  - (3) **Limitation based on gain—** In the case of the sale of the principal residence to a person who is not related to the [taxpayer](/usc/26/1313.md?p=b), the increase in tax determined under [paragraph (2)](#f-2) shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under [subsection (a)](#a) to the extent not previously recaptured under [paragraph (1)](#f-1).
  - (4) **Exceptions—**
    - (A) **Death of taxpayer—** Paragraphs [(1)](#f-1) and [(2)](#f-2) shall not apply to any taxable year ending after the date of the [taxpayer](/usc/26/1313.md?p=b)’s death.
    - (B) **Involuntary conversion—** [Paragraph (2)](#f-2) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of [section 1033(a)](/usc/26/1033.md?p=a)) if the [taxpayer](/usc/26/1313.md?p=b) acquires a new principal residence during the 2-year period beginning on the date of the [disposition](/usc/26/424.md?p=c-1) or cessation referred to in [paragraph (2)](#f-2). [Paragraph (2)](#f-2) shall apply to such new principal residence during the recapture period in the same manner as if such new principal residence were the converted residence.
    - (C) **Transfers between spouses or incident to divorce—** In the case of a transfer of a residence to which [section 1041(a)](/usc/26/1041.md?p=a) applies—
      - (i) [paragraph (2)](#f-2) shall not apply to such transfer, and
      - (ii) in the case of taxable years ending after such transfer, paragraphs [(1)](#f-1) and [(2)](#f-2) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor).
    - (D) **Waiver of recapture for purchases in 2009 and 2010—** In the case of any credit allowed with respect to the [purchase](/usc/26/1361.md?p=e-1-C) of a principal residence after December 31, 2008—
      - (i) [paragraph (1)](#f-1) shall not apply, and
      - (ii) [paragraph (2)](#f-2) shall apply only if the [disposition](/usc/26/424.md?p=c-1) or cessation described in [paragraph (2)](#f-2) with respect to such residence occurs during the 36-month period beginning on the date of the [purchase](/usc/26/1361.md?p=e-1-C) of such residence by the [taxpayer](/usc/26/1313.md?p=b).
    - (E) **Special rule for members of the armed forces, etc.**
      - (i) **In general—** In the case of the [disposition](/usc/26/424.md?p=c-1) of a principal residence by an individual (or a cessation referred to in [paragraph (2)](#f-2)) after December 31, 2008, in connection with Government orders received by such individual, or such individual’s spouse, for qualified official extended duty service—
        - (I) [paragraph (2)](#f-2) and [subsection (d)(2)](#d-2) shall not apply to such [disposition](/usc/26/424.md?p=c-1) (or cessation), and
        - (II) if such residence was acquired before January 1, 2009, [paragraph (1)](#f-1) shall not apply to the taxable year in which such [disposition](/usc/26/424.md?p=c-1) (or cessation) occurs or any subsequent taxable year.
      - (ii) **Qualified official extended duty service—** For purposes of this section, the term “qualified official extended duty service” means service on qualified official extended duty as—
        - (I) a member of the uniformed services,
        - (II) a member of the Foreign Service of the [United States](/usc/26/993.md?p=g), or
        - (III) an [employee](/usc/26/430.md?p=c-7-D-vi) of the intelligence community.
      - (iii) **Definitions—** Any term used in this subparagraph which is also used in [paragraph (9)](/usc/26/121.md?p=d-9) of section 121(d) shall have the same meaning as when used in such paragraph.
  - (5) **Joint returns—** In the case of a credit allowed under [subsection (a)](#a) with respect to a [joint return](/usc/26/62.md?p=b-3-D), half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection.
  - (6) **Return requirement—** If the tax imposed by this chapter for the taxable year is increased under this subsection, the [taxpayer](/usc/26/1313.md?p=b) shall, notwithstanding [section 6012](/usc/26/6012.md), be required to file a return with respect to the taxes imposed under this subtitle.
  - (7) **Recapture period—** For purposes of this subsection, the term “recapture period” means the 15 taxable years beginning with the second taxable year following the taxable year in which the [purchase](/usc/26/1361.md?p=e-1-C) of the principal residence for which a credit is allowed under [subsection (a)](#a) was made.
- (g) **Election to treat purchase in prior year—** In the case of a [purchase](/usc/26/1361.md?p=e-1-C) of a principal residence after December 31, 2008, a [taxpayer](/usc/26/1313.md?p=b) may elect to treat such [purchase](/usc/26/1361.md?p=e-1-C) as made on December 31 of the calendar year preceding such [purchase](/usc/26/1361.md?p=e-1-C) for purposes of this section (other than subsections [(b)(4)](#b-4), [(c)](#c), [(f)(4)(D)](#f-4-D), and [(h)](#h)).
- (h) **Application of section—**
  - (1) **In general—** This section shall only apply to a principal residence purchased by the [taxpayer](/usc/26/1313.md?p=b) on or after April 9, 2008, and before May 1, 2010.
  - (2) **Exception in case of binding contract—** In the case of any [taxpayer](/usc/26/1313.md?p=b) who enters into a written binding [contract](/usc/26/101.md?p=f-3-A) before May 1, 2010, to close on the [purchase](/usc/26/1361.md?p=e-1-C) of a principal residence before July 1, 2010, and who [purchases](/usc/26/1361.md?p=e-1-C) such residence before October 1, 2010, [paragraph (1)](#h-1) shall be applied by substituting “October 1, 2010” for “May 1, 2010”.
  - (3) **Special rule for individuals on qualified official extended duty outside the United States—** In the case of any individual who serves on qualified official extended duty service (as defined in [section 121(d)(9)(C)(i)](/usc/26/121.md?p=d-9-C-i)) outside the [United States](/usc/26/993.md?p=g) for at least 90 days during the period beginning after December 31, 2008, and ending before May 1, 2010, and, if married, such individual’s spouse—
    - (A) paragraphs [(1)](#h-1) and [(2)](#h-2) shall each be applied by substituting “May 1, 2011” for “May 1, 2010”, and
    - (B) [paragraph (2)](#h-2) shall be applied by substituting “July 1, 2011” for “July 1, 2010”, and for “October 1, 2010”.

## Source credit

(Added Pub. L. 110–289, div. C, title I, § 3011(a), July 30, 2008, 122 Stat. 2888; amended Pub. L. 111–5, div. B, title I, § 1006(a)–(c), (d)(2), (e), Feb. 17, 2009, 123 Stat. 316, 317; Pub. L. 111–92, §§ 11(a)–(g), 12(a)–(c), Nov. 6, 2009, 123 Stat. 2989–2992; Pub. L. 111–198, § 2(a), (b), July 2, 2010, 124 Stat. 1356.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 36 was renumbered section 37 of this title.

Another prior section 36, acts Aug. 16, 1954, ch. 736, 68A Stat. 15; Oct. 4, 1976, Pub. L. 94–455, title V, § 501(b)(2), title X, § 1011(c), title XIX, § 1901(b)(1)(A), 90 Stat. 1558, 1611, 1790, directed that credits provided by section 32 not be allowed if an individual elects under section 144 to take standard deduction, prior to repeal by Pub. L. 95–30, title I, §§ 101(d)(3), 106(a), May 23, 1977, 91 Stat. 133, 141, applicable to taxable years beginning after Dec. 31, 1976.

### Amendments

2010—Subsec. (h)(2). Pub. L. 111–198, § 2(a), substituted “and who purchases such residence before October 1, 2010, paragraph (1) shall be applied by substituting ‘October 1, 2010’ ” for “paragraph (1) shall be applied by substituting ‘July 1, 2010’ ”.

Subsec. (h)(3)(B). Pub. L. 111–198, § 2(b), inserted “, and for ‘October 1, 2010’ ” after “for ‘July 1, 2010’ ”.

2009—Subsec. (b)(1)(A). Pub. L. 111–5, § 1006(b)(1), substituted “$8,000” for “$7,500”.

Subsec. (b)(1)(B). Pub. L. 111–5, § 1006(b), substituted “$4,000” for “$3,750” and “$8,000” for “$7,500”.

Subsec. (b)(1)(C). Pub. L. 111–5, § 1006(b)(1), substituted “$8,000” for “$7,500”.

Subsec. (b)(1)(D). Pub. L. 111–92, § 11(c)(1), added subpar. (D).

Subsec. (b)(2)(A)(i)(II). Pub. L. 111–92, § 11(c)(2), substituted “$125,000 ($225,000” for “$75,000 ($150,000”.

Subsec. (b)(3). Pub. L. 111–92, § 11(d), added par. (3).

Subsec. (b)(4). Pub. L. 111–92, § 12(a)(1), added par. (4).

Subsec. (c)(3)(A)(i). Pub. L. 111–92, § 12(c), inserted “(or, if married, such individual’s spouse)” after “person acquiring such property”.

Subsec. (c)(6). Pub. L. 111–92, § 11(b), added par. (6).

Subsec. (d). Pub. L. 111–5, § 1006(d)(2), (e), redesignated pars. (3) and (4) as (1) and (2), respectively, and struck out former pars. (1) and (2) which read as follows:

“(1) a credit under section 1400C (relating to first-time homebuyer in the District of Columbia) is allowable to the taxpayer (or the taxpayer’s spouse) for such taxable year or any prior taxable year,

“(2) the residence is financed by the proceeds of a qualified mortgage issue the interest on which is exempt from tax under section 103,”.

Subsec. (d)(3). Pub. L. 111–92, § 11(g), added par. (3).

Subsec. (d)(4). Pub. L. 111–92, § 12(b), added par. (4).

Subsec. (f)(4)(D). Pub. L. 111–92, § 11(a)(2), inserted “and 2010” after “2009” in heading and struck out “, and before December 1, 2009” after “December 31, 2008” in introductory provisions.

Pub. L. 111–5, § 1006(c)(1), added subpar. (D).

Subsec. (f)(4)(E). Pub. L. 111–92, § 11(e), added subpar. (E).

Subsec. (g). Pub. L. 111–92, § 12(a)(2), inserted “(b)(4),” before “(c)”.

Pub. L. 111–92, § 11(a)(3), amended subsec. (g) generally. Prior to amendment, text read as follows: “In the case of a purchase of a principal residence after December 31, 2008, and before December 1, 2009, a taxpayer may elect to treat such purchase as made on December 31, 2008, for purposes of this section (other than subsections (c) and (f)(4)(D)).”

Pub. L. 111–5, § 1006(a)(2), (c)(2), substituted “December 1, 2009” for “July 1, 2009” and “subsections (c) and (f)(4)(D)” for “subsection (c)”.

Subsec. (h). Pub. L. 111–92, § 11(a)(1), substituted “May 1, 2010” for “December 1, 2009”, designated existing provisions as par. (1), inserted heading, and added par. (2).

Pub. L. 111–5, § 1006(a)(1), substituted “December 1, 2009” for “July 1, 2009”.

Subsec. (h)(3). Pub. L. 111–92, § 11(f), added par. (3).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Pub. L. 111–198, § 2(c), July 2, 2010, 124 Stat. 1356, provided that: “The amendments made by this section [amending this section] shall apply to residences purchased after June 30, 2010.”

### Effective Date of 2009 Amendment

Pub. L. 111–92, § 11(j)(1)–(3), Nov. 6, 2009, 123 Stat. 2991, provided that: In general.—The amendments made by subsections (b), (c), (d), and (g) [amending this section] shall apply to residences purchased after the date of the enactment of this Act [Nov. 6, 2009]. Extensions.—The amendments made by subsections (a) [amending this section], (f) [amending this section], and (i) [amending section 1400C of this title] shall apply to residences purchased after November 30, 2009. Waiver of recapture.—The amendment made by subsection (e) [amending this section] shall apply to dispositions and cessations after December 31, 2008.”

Pub. L. 111–92, § 12(e), Nov. 6, 2009, 123 Stat. 2992, provided that: In general.—Except as otherwise provided in this subsection, the amendments made by this section [amending this section and section 6213 of this title] shall apply to purchases after the date of the enactment of this Act [Nov. 6, 2009]. Documentation requirement.—The amendments made by subsection (b) [amending this section] shall apply to returns for taxable years ending after the date of the enactment of this Act [Nov. 6, 2009]. Treatment as mathematical and clerical errors.—The amendments made by subsection (d) [amending section 6213 of this title] shall apply to returns for taxable years ending on or after April 9, 2008.”

Pub. L. 111–5, div. B, title I, § 1006(f), Feb. 17, 2009, 123 Stat. 317, provided that: “The amendments made by this section [amending this section and section 1400C of this title] shall apply to residences purchased after December 31, 2008.”

### Effective Date

Section applicable to residences purchased on or after Apr. 9, 2008, in taxable years ending on or after such date, see section 3011(c) of Pub. L. 110–289, set out as an Effective Date of 2008 Amendment note under section 26 of this title.