The law defines a “first-time home buyer” as a person who has not owned a primary residence within three-years prior to the purchase. For married couples, the law tests the homeownership history of both the home buyer and the spouse.
For example, if your spouse has not owned a home in the past three years but you have owned a principal residence, you and your spouse do not qualify as first-time buyer. Good news is, ownership of a rental property or vacation home not used as a principal residence does not disqualify a buyer as a first-time home buyer.
The IRS, however, does allow unmarried joint buyers to allocate the credit to any buyer who qualifies as a first-time buyer, as may occur when a parent purchases a home jointly with a son or daughter.
