First Time Home Buyer Tax Credit

1. The tax credit included in the economic stimulus legislation is equivalent to 10% of the purchase price-capped at $8,000-applies only to first time and principal residences and does not have to be repaid.
2. The legislation defines a "first time home buyer" as someone who hasn't owned a principal residence for three years before buying a house. The date of purchase is considered to be the date the title is transferred. If you owned a second/vacation home-but not a principal residence-within the past three years, you would still qualify for the tax credit.
3. The home must be purchased on or after January 1, 2009 and before December 1, 2009 to be eligible for the tax credit.
4. The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit and for married couples the adjusted gross income to qualify is $150,000. Those earning more than these thresholds may be eligible for reduced credits.
5. Buyers must own the home for at least three years in order to capitalize on the credit. If the home is sold before then, you will have to return the credit to the government. Exceptions will be made in certain cases, such as death or divorce.