One of the many reasons why first time homebuyers should be looking to buy soon is this great tax credit. It does not apply to everybody, or every house, but here are some of the basics.

1. You may qualify even if you have owned a home before.

2. The credit is 10% of the purchase price, up to $8,000.

3. This credit is available for home sales closed between Jan. 1 and Nov. 30, 2009 only.

4. This is only for personal residences, not rental or other investment property, not vacation homes.

5. If you are an individual with an Adjusted Gross Income of $75,000 or less, you can earn the whole credit. If you make more than that, the credit gets reduced based on how much more you earned, disappearing entirely at $95,000. Same deal for joint tax return filers but the reduction starting point is $150,000, and the credit is gone at $170,000.

6. Look at IRS Form 5405 to see the surprisingly simple form for figuring your credit.

7. And a neat trick: if you buy in 2009 you can amend your 2008 tax return, re-file, and get the credit quickly, rather than waiting until early 2010 to file for it on your 2009 return!

8. People who are married but file separately instead of jointly can each claim up to $4,000 if all of the above rules fit.

9. You can’t get the money in time to use it for your downpayment; and you can’t convince the lender to count it in your assets before you have it to improve your ratios.

10. The credit is actually paid to you by the IRS. 

11. What if you are buying a home, expect to close by Nov 30, but somebody moves slow and closing gets delayed to Dec. 1 or later. Can you still get the credit? No! You really must close by Nov. 30. Another good reason to use a Buyer’s Agent!

For a more detailed discussion on this topic, please go to http://solonglandlord.com/achieving-the-dream/first-time-homebuyer-8000-tax-credit.