FIRST-TIME* HOME BUYER TAX CREDIT

*According to the definition used in this instance, "first-time home buyer" also includes those who have not owned a personal residence within the past three years.  For married couples, neither party may have owned a residence within the past three years to qualify.

The Federal government's stimulous package recently passed by Congress and signed by the President offers many provisions to assist the economy.  Among these provisions is the first-time home buyers' tax credit.  Provisions allow for a $7,500 tax credit when first-time home buyers meet income and other qualifications.  Unlike previous tax credits, this one must be repaid over 15 years.

To qualify for this tax credit, purchases must be made between April 9, 2008, and before July 1, 2009.  The time period is based on the date escrow closes and for new construction at least, the date occupancy occurs.

The acquired residence may be either new or a resale.  It can be a single-family home, condominium or townhouse.  There appear to be no limitations on the purchase price.  Thus with a large down payment, buyers may apparently purchase a more costly home.

Income qualification and the allowed tax credit allow for specific adjustments.  These and all other aspects of this tax credit should be discussed with your tax accountant or attorney who can provide specific and detailed advice to you based upon your situation.

How this tax code applies in specific circumstances, with questions and answers, can be found here in a guide prepared by the National Association of Home Builders.  Note that they also strongly advise readers to verify all information with their personal tax professionals.