FIRST TIME HOMEBUYER TAX CREDIT
In 2008 Congress passed a $7500 tax credit designed to be an incentive for first time homebuyers. The credit was designed as a mechanism to decrease the over supply of homes for sale. For 2009, Congress has increased the credit to $8000 and made several improvements. One significant change is that unlike the 2008 credit, the 2009 credit does not require repayment.
Only first homebuyers are eligible and you must purchase a home between January 1, 2009 and before December 1, 2009. A person is considered a first time buyer if they have not had any ownership interest in a home in the three years previous to the date of the 2009 purchase.
Every dollar of a tax credit reduces income taxes by a dollar. If you owe less than the $8000 tax credit, the government will send you a check for the difference. If you only had a tax liability of $4000 you would receive a check from Uncle Sam for $4000. If you don’t owe any income tax, you would be eligible for the whole $8000.
For more details and qualifying information please see your tax accountant. It’s definitely worth looking into.