First-time home buyers are eligible for a $7,500 tax credit through the American Housing Rescue and Foreclosure Prevention Act, which Congress passed at the end of July. To qualify for the credit, annual income can’t exceed $75,000 and the buyer can’t have owned a principal residence during the past three years. The credit can reduce tax liability, but has to be paid back at $500 a year. Income for the full credit can’t exceed $75,000 or $150,000 for a couple filing jointly. For a partial credit, income is capped at $95,000 for an individual and $170,000 for a couple.