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The President’s Stimulus Package may be able to help you buy your first home. Find out whether or not you qualify for the special tax credit available as part of the federal Stimulus Package.

The main thing to consider is that the program is for first time home buyers. If this is your first home purchase, there may be a tax credit available to you. If, for the past three years you haven’t owned a home, you may also qualify. Owning a vacation home or rental property doesn’t make you ineligible for the tax credit.

One question that comes immediately to mind is how much of a tax credit can you get?

The credit can be the smaller of either 10% of what the home costs, or $8,000.

In order to qualify, you would have to buy the home between January 1 and December 31 of 2009.

Neither repayment nor recapture are applicable unless you have owned for fewer than 36 months.

Regardless of whether your tax paid equals the amount of the tax credit or is less, you may still get a refund equal to the maximum credit.

Modified adjusted gross income, known as the MAGI, will be used as the main determining factor of whether or not you qualify for the tax credit. For a single person, MAGI of $75,000 is the qualifying number. For a married couple it would be $150,000.

There are partial credits available for those with a MAGI above these amounts up to MAGI of $95,000 for singles and $170,000 for married couples. Spouses who file separately can each claim the lesser of either $4,000 or 5% of the purchase price.

Changing your tax withholdings in 2009 to the amount of the tax credit may help you save for a down-payment if you intend to buy by the end of the year, but be sure of your plans because if things change and you do not buy your home by the close of 2009 the IRS will expect repayment.

There is a special situation for those with a home under construction. Eligibility is determined based on when the home is occupied.

If you close on the home during 2009 and move in before December 31, 2009, you can qualify for the credit, regardless of building starting in 2008.

A home purchased in 2009 may possibly be eligible for a credit on the 2008 tax year.

Different governments have resorted to different tactics to overcome the present global economic crisis, which basically started with the sub prime housing issue that rocked the entire of the United States culminating in a crisis that has crippled world economy. The federal government has also taken several initiatives to boost the housing sector, which has seen a big fall since the crisis broke out. As a part of such initiatives to boost the real estate markets, the federal government has come up with incentives that encourage you to buy homes. Getting a tax credit for purchasing a house is one such initiative. First time house buyers are eligible for this credit and there are a few other conditions that need to be met inorder for an individual to be eligible for this credit. Such initiatives always give a fillip to the housing sector and are a driving force for many home buyers to purchase a home. The conditions that need to be met for a person to avail of this benefit are:

Any home purchase that takes place between 1st January 2009 and 31st December 2009 is considered to be eligible for this scheme. The individual has to be a first time home buyer. This is vital, because lot of home buyers who were on the threshold of a purchase were found to be waiting for the rates to drop further, and such a scheme shall encourage them to go for the purchase before the deadline of 31st December 2009 expires. To be considered as a first time buyer, the most important criterion is that you should not have purchased any principal residence in the last three years. Vacation homes and homes being rented out are exempt from being considered principal residences. Hence, ownership of these in the last three years is not a deterrent for a person being labeled a first time buyer. Another condition is the fact that the salary has to be in the threshold of $75000 for individuals and $150000 for joint purchases.

These tax credits can be applied while your returns for 2008-09 are bring filed or as amendment after wards if the purchase has happened after the filing.  The credit is refundable and to capitalize on the credit, the owners have to hold the house for atleast three years.

Such packages form stimulus for the entire housing sector to be revived and provide hopes for millions of people who are engaged in the business of constructing houses. Thus the government not only boosts the economy, but is also successful in providing employment to many people who have lost their jobs in the present meltdown.