First-time home buyer credit: Is it easy to get?

By Erica Shaffer - bio | email

Posted by Lisa Strawbridge - email

(WTOL) - You've probably heard about the $8000 tax credit for first-time home buyers. But how easy is it to take advantage of?

For Sale signs are everywhere, increasing the temptation for first-time home buyers. Low interest rates and house prices are another added bonus. "I can't really think of a better time to buy than now. This is the time when you should be buying," said realtor Kendall Gigax.

For many people, free money sounds too good to be true. But not this time.

Since last year, the first-time home buyer tax credit has changed to your advantage. Here are the basic facts for 2009:

  • To receive the full tax credit, a single person must make under $75,000; a couple under $150,000.
  • Any house over $80,000 will get a tax credit of $8,000. A house below $80,000 will get a tax credit of 10% of the purchase price.
  • You don't have to pay back the money as long as you live in the house for three years.

Here is another bonus: People who have been previous homeowners, but not in the last three years qualify for the credit.

Accountant Rich Bitter says he's had customers who didn't know they qualified for the credit. "They came in, and they'd bought a home. I asked, 'Have you had a home in the last three years, and they said, 'No'. Well, you're entitled to this credit."

Bitter says the process is simple. "It is a fairly simple form to fill out. There are only six lines on the form."

If you are thinking about buying a home for the first time, the money is out there, but you are running out of time. "There's only a few months left of it, and I think you may kick yourself a year later when you didn't take advantage of it." You must have purchased your home by December 1, 2009 in order to qualify.

There are other ways that you can make the tax credit work to your advantage, like filling an amendment to your 2008 fillings instead of your 2009.