Claim a Refundable Tax Credit for a New Home
Certain home buyers get a refundable tax credit. To stimulate the housing market, a new incentive is being offered to first-time home buyers. You can claim a refundable tax credit of up to $8,000 or 10% of the purchase price for any primary residence bought between April 8, 2008, and Dec. 1, 2009. A tax credit is more valuable than a deduction; the amount comes directly off the taxes you owe. Refundable simply means that if you owe less tax than the credit is worth, you get the difference as a refund. You can claim this credit even if you bought the house after Dec. 31. To be eligible, you must not have owned any other main home for the three years leading up to the date you bought the house. The credit phases out for individuals beginning at $75,000 of adjusted gross income and for couples at $150,000.