$8,000 Tax Credit - At A Glance

If the mortgage interest, property tax, and slew of other homeownership tax deductions weren't enough, Congress has added yet another homeownership incentive: A dollar-for-dollar tax credit of $8,000 when you purchase a home. Want to know if you qualify? Here's an overview of this newest tax break:

Amount of Credit

Ten percent of the cost of the home, not to exceed $8,000.

Eligible Home Buyers

Home buyers (including spouses) who have not owned a principal residence in the three years prior to the purchase. Those who do not own their principal residence but own a vacation home or other property also qualify for the credit if they are purchasing a principal residence.

Eligible Properties

Any single-family home, town house, condominium or co-op that will be used as a principal residence.

Income Limits

Taxpayers with adjusted gross incomes of up to $75,000 for singles and $150,000 for couples qualify for the full credit. A partial credit is available to taxpayers who make more than those amounts, not to exceed $95,000 for singles and $170,000 for joint filers.

Qualifying Dates

The credit is available to those who purchase a home after Jan. 1, 2009, and before Dec. 1, 2009.

Refundable

The credit will reduce any tax liability owed for the year. If there is excess, the money will be refunded. For example, if you owed $1,000 in taxes and used the $8,000 credit, you could receive a rebate check of $7,000.

Recapture

There is no repayment for purchases made after Jan. 1, 2009, and before Dec. 1, 2009. However, if the home is sold before three years, the entire amount is recaptured upon the sale.