If you are a first time home buyer, you still have time to take advantage of a unique windfall provided by the U.S. government’s economic stimulus package.  A first time home buyer is generally defined as a taxpayer who has not owned another principal residence at any time during the three years prior to the date of purchase.  You may be entitled to a tax credit up to $8,000 if you purchase AND CLOSE on your home on or before November 30, 2009.

The tax credit is available to those who purchase their first home between January 1, 2009 and November 30, 2009.  The tax credit amount is the lesser of $8,000 or 10% of the purchase price.  To avoid possible abuse of this credit, it is only allowed for primary residences and will have to be repaid if this home is sold within two years of purchase. 

Closing periods can take up to 60 days, so it would be wise to have an accepted contract on your home no later than October 1, 2009.  Be advised, some purchases may take longer than 60 days to close, so don’t wait.  This gives you 61 days from today to find your home.  If you manage to meet the IRS’ criteria, all you have to do to claim the credit is file IRS Form 5405.

For more information about this credit, please visit the IRS web site.

To see if you qualify from an income perspective, read more about the IRS’ income limitations.

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