If you are a first-time home buyer this year, you may be eligible to take a tax credit of $8,000, making it easier to afford to make the financial leap.
Under the federal stimulus package passed earlier this year, first-time home buyers can deduct 10 percent of the cost of a home purchased as your primary residence -- up to $80,000, for a maximum of $8,000 -- from their income tax. It is a refundable tax credit, so if you owe less than your credit, you can get the difference in your income-tax refund. This year's federal stimulus package explicitly offers the tax credit to state residents, but is silent on the territories.
"There has been some concern that because language in the stimulus legislation states that those eligible for the credit include the 50 states and the District of Colombia that the territories are not eligible," Delegate Donna M. Christensen said in a statement from her office. "However, for the Virgin Islands and Guam, the mirror tax makes changes to the�U.S.code applicable to our territories."
If you already purchased a home you can still use the deduction, so long as the purchase was after Jan. 1. If you are considering buying a home, the tax credit is another factor to consider as you budget and determine what you can afford.
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