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If you bought a home in 2008 and claimed the federal First-Time Homebuyer Credit, its scheduled 15-year repayment period ended with your 2024 tax return. The IRS says 2024 was the final year to file Form 5405 for this repayment schedule; there is no routine installment for 2025 or 2026. That does not resolve a missed or incorrect prior-year return, an IRS notice, or a special event involving the home. Those questions depend on your records and circumstances.
When was the last repayment?
For a home purchased in 2008, the IRS required repayment in 15 annual installments. The period began with the 2010 tax return and ended with the 2024 tax return, according to the Instructions for Form 5405 (11/2024). The IRS reiterated that schedule in its January 23, 2026 announcement, “Form 5405 will no longer be revised”.
For example, the IRS instructions show that a $7,500 credit produces a $500 annual installment over 15 years, before accounting for any additional repayments made in earlier years. If you paid more than the required installment in an earlier year, that can reduce the final amount due.
The end of the schedule means no routine 2008-credit installment belongs on a 2025 or 2026 return. It does not establish whether you filed every earlier return correctly or whether an amount remains due because of a past-year issue.
Do you need Form 5405?
Form 5405 was not required for every ordinary annual installment. For tax year 2024, if you continued to own and use the home as your main home throughout the year, the installment generally went on Schedule 2 (Form 1040), line 10. The IRS instructions say to file Form 5405 with the 2024 return if you disposed of the home or it stopped being your main home during 2024, subject to exceptions.
The IRS says Form 5405 and its instructions will not be updated after tax year 2024. The form is therefore relevant to the final scheduled year and certain event-specific calculations, not a recurring installment in later years.
What if you sold or otherwise disposed of the home?
A sale, transfer, condemnation, destruction, or change in how the property is used can alter the repayment calculation or who is responsible. The applicable rule depends on the event and details such as whether the transaction produced a gain and whether the buyer was related. The IRS’s Form 5405 instructions give the event-specific rules.
Sale to an unrelated person
For an ordinary sale to an unrelated buyer, repayment in the sale year is generally limited to the gain on the disposition. If the remaining credit exceeds that limit, the excess generally does not have to be repaid. A sale with no gain can therefore have a different result from a sale that produces a gain.
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Sale or transfer to a related person
A related-person sale can be treated differently from an unrelated-party sale. The IRS definition includes a spouse, ancestors, lineal descendants, and certain entities in which you hold more than 50% ownership or interest. Do not assume the gain limit for an unrelated-party sale applies to a related-party transaction; check the instructions for your facts.
Divorce, death, destruction, and condemnation
- Divorce transfer: If the home was transferred to a spouse or former spouse under a divorce settlement, the spouse who received it is responsible for repayment if no other exception applies.
- Death: The remaining balance generally is not due when the claimant dies. If the credit was claimed jointly, the surviving spouse generally remains responsible for their own half.
- Destruction or condemnation: The instructions address homes destroyed or sold through condemnation, or under threat of condemnation, to an unrelated person. Repayment can be limited by the gain in applicable cases.
- Official extended duty: Qualified official extended duty can eliminate repayment when the stated conditions are met.
These are not interchangeable exceptions. Review the IRS instructions for the specific event before deciding what to report or whether repayment is due.
Rental or business use
If the entire home stopped being your main home or was converted to rental or business use, filing and repayment treatment can differ from a partial conversion. The IRS gives a 2024 example in which converting only a basement did not require Form 5405 because the taxpayer continued using the rest of the home as a main home; the installment went on Schedule 2 instead.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What if you already paid more than an installment?
Additional payments made in earlier years can reduce the final scheduled installment. The IRS’s example is a $7,500 credit divided into $500 yearly installments, but the amount you personally owe cannot be determined from that example alone. Check your original credit amount and records of repayments, then use the applicable Form 5405 instructions for the relevant tax year and circumstances.
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What if you have an unresolved prior-year return or IRS notice?
The 2024 endpoint closes the original repayment schedule; it does not determine an individual balance, confirm that a past return was filed correctly, or resolve an IRS notice. Gather the original credit information, filed returns, payment records, and the notice or other IRS correspondence. Follow the instructions for the tax year and issue involved. If the question turns on a sale, transfer, prior-year reporting, or an IRS assessment, consider consulting a qualified tax professional who can review the documents and facts.
Why might the credit amount differ?
The credit was a historical tax provision, not a current offer. The original 2008 Form 5405 describes the general credit as the smaller of $7,500 or 10% of the home’s purchase price, subject to eligibility, income, and filing-status conditions. Your repayment calculation should be based on the credit actually claimed and the applicable rules, not just the general maximum.
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