If you’re buying a home in 2009, you could qualify for the first-time home buyer credit.  It allows you a credit of up to $8000, and it’s not a deduction, where you might only get a certain percentage back.  It counts as a complete refund, so you get the entire amount!  Here’s what you need to know.

First-Time Primary Residence

The home you’re purchasing has to be your primary residence.  If you’re buying a vacation home or any secondary residence, you won’t qualify for the first-time home buyer credit.  You also have to own the residence for three years, or you’ll have to pay back the entire credit.

As long as you haven’t owned a primary residence within the last three years, you’re on the road to qualification.  It gets a little tricky if you’re buying a home with your significant other.  If you’re married and you owned a home but your spouse didn’t, neither one of you will qualify for the first-time home buyer credit.  However, if you’re not married, the person that did not own a primary residence can help qualify the purchase.

Home Buyer Credit Limitations

It’s important to note that you are not guaranteed $8000, though.  The amount you actually get back is 10% of the purchase price of the home, up to $8000.  There’s also an income limit.  Single people can qualify with an income of up to $75,000 a year, and married couples can qualify making a combined income of $150,000.

Once you get past the qualification, receiving the credit is fairly easy.  You do not need to fill out any special forms; just claim it on your tax return.  Again, it doesn’t count as a deduction because you will be receiving the entire amount back, so if you happen to owe money on your taxes, the first-time home buyer credit could turn things around and the government will end up sending you a check minus what you owed.  You can also talk to your employer to adjust the income tax withholding if you want to see your money sooner than next year, or speak to your mortgage lender about how to apply the credit toward the down payment on your new home.