It sounds like you had a lease with an option to buy. Sadly, lease option and lease purchase contracts are NOT considered to be bona fide sales and do NOT qualify a buyer for the First Time Home Buyer Tax Credit of $8,000. Therefore, you should not have received the first-time home buyer tax credit in the first place. If this is the case you have committed tax fraud and should immediately pay back the money regardless....fines and penalties will come later.
If you had actually purchased this home and it is yours then yes, you will have to pay back the rebate in full when you file your taxes next April. However, you said you "opted not to buy". This leads one to believe you indeed had a lease with an option to buy because in a bona fide home purchase there are no such options.
· 8 years ago