You've had to have heard by now about the "stimulus" bill pased by the House and Senate and signed in to law by the President earlier this week. While the $15,000 home Buyer tax credit did not get approved, the House and Senate did agree on an $8,000 home Buyer tax credit. While $15,000 would have been better for Buyers, $8,000 will still be a big boost to those Buyers who have not owned a home in the last three years. Here are the details of, and what you need to know about, the home Buyer tax credit that was part of the stimulus bill that the President signed into law earlier this week.

1.  The home Buyer tax credit is equivalent to 10% of the purchase price of the home, but it is capped at $8,000 and applies only to first time home Buyers for their principal residences.  Unlike the earlier $7,500 home Buyer tax credit, this one does not have to be repaid.

2.  First time buyers defined.  For the purpose of this legislation, a “first time home buyer” is someone who hasn’t owned a principal residence for three years before buying a house.  The date of purchase is considered the day that the title is transferred.  That means if you’ve owned a vacation home, but not a principal residence within the past three years, you would still qualify for the credit. 

3.  2009 buyers only.  Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won’t be able to take advantage of it.

4.  Income limits.  The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that’s $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits. 

5.  Refundable.  Because the tax credit is “refundable,” qualified buyers can take advantage of it even if they don’t have much tax liability. In other words…unlike the $15,000 tax credit, this tax credit will be refunded to a buyer, if his year end tax liability is less than the credit.

6.  Recapture.  Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government.  Exceptions will be made in certain cases, such as death or divorce.  While the final approved tax credit was not nearly as generous or as liberal as the original Senate version, it is still better than nothing for first time home Buyers and many Buyers will be able to make a purchase.