Virginia homebuyers would qualify for a limited state tax credit

Eligible homebuyers would be allowed a one-time state income tax credit equal to 5% of the purchase price, up to $10,000. Individuals and married couples filing jointly would qualify if household income in the most recent tax year does not exceed the greater of $100,000 or the median household income where the home is located, using the latest U.S. Census Bureau data. Buyers must have owned no share of a main home during the three years ending on the purchase date. Total credits would be capped at $10 million per tax year and awarded first come, first served. The credit would cover purchase expenses incurred in tax years beginning on or after January 1, 2026, and before January 1, 2031.

Buyers would use the credit to reduce state income taxes they owe. These limits would apply to buyers who receive the homebuyer credit. The credit claimed in any year could not exceed the buyer's state income tax bill. Unused credit would not be paid as a cash refund. Unused credit could be claimed in the five tax years following the year of the purchase expenses, ending sooner if the full credit is used.

Buyers would repay any credit they claimed if they sell the home within three years of buying it. The rule would cover the home whose purchase qualified the buyer for the credit. Repayment would not be required if the sale follows a natural disaster or another act of nature that made the home unlivable. The three-year period would run from the home's purchase date.