The Housing Assistance Act of 2008 provided for first time homebuyers a temporary refundable tax credit equal to 10% of the purchase price of a home, up to a maximum of $7500. However, if a taxpayer’s adjusted gross income is in excess of $75000 ($150000 for a joint return) the credit will be phased out. The credit will be effective for homes purchased between April 9, 2008 to July 1, 2009. You are a “first time homebuyer” if you have not had an ownership interest in a principal residence during the 3 year period before the home is purchased. One critical thing to know is that the IRS does not have a cash credit ready for you at the closing table. You must claim the credit on either the 2008 or 2009 tax return. Also, you need to know that the credit MUST BE REPAID. You will pay in back in 15 years of equal installments starting 2 years after the home is purchased. There are more details involving this credit, so make sure to contact your professional tax adviser to check if this works for you.