Claiming your $8,000 home buying tax credit

I think it was Milton Friedman who claimed to like all tax cuts – but some he liked more than others…

As I’ve stated very publicly before, I do NOT like all this “stimulus” that is being passed in Congress and believe that much of it will eventually lead to even higher home prices in the long run, however, if you have a chance to take a tax credit, then by all means, I urge you to take it!

Denver was recently named by Forbes magazine as one of the Top 10 Best Housing Markets in the country which likely means prices here aren’t going to go much (if any) lower.

So if you’re a first time home buyer, and wondering about how the $8,000 tax credit works, here is the Skinny:

It’s actually a CREDIT this time. Not a 0% interest loan pretending to be a tax credit. It does NOT have to be paid back. You deduct it from your taxes next year IF you buy a home between January 1, 2009 and December 1, 2009. No, the December 1 part doesn’t make sense to me either. Why not December 31? I don’t make the rules…

You must not have owned a home in the last 3 years to qualify.

If your income tax liability is less than $8,000 you will get money back.

If you’re single you must make less than $75,000 a year and a couple less than $150,000.

And yes, if you’re claiming the 2008 “credit” from a home purchase you still have to pay that back.

If you’d like a lot more detail on the 2009 home buyer’s credit go here.