If you are a first time home buyer (defined as someone who hasn’t owned a principle residence in the past 3 years) and you bought a home on or after April 9, 2008 you may qualify for up to a $7500 tax credit.

There ARE a few conditions and caveats. The tax credit is refundable, which means you have to pay it back. So it’s more like an interest free loan that gets paid back over the next 15 years starting for the 2010 tax year for houses bought in 2008, 2011 for homes bought in 2009. Houses must be bought between April 9, 2008 and July 1, 2009.

The amount of the tax credit is dependent on the price of the house – 10% of the cost of the home with a maximum credit of $7,500. And there are income restrictions which are explained quite thoroughly in the link below.

All in all, it’s worth looking into and worth discussing with your accountant. If you’re thinking about buying a house, but not quite sure if this is the right time, this is something else to consider along with low housing prices and low interest rates.

Click here for more details about the first time homebuyer tax credit