comments
$15,000 Homebuyer Tax Break
Email
 Print
|
Update 2/12: The $15,000 provision has been replaced by an $8,000 first-time home buyer credit, according to the Wall Street Journal.
Holy schmoly… the Senate just voted and included a $15,000 tax break to homebuyers!
It was an addition that Senate Republicans wanted in order to leave “their mark” on the economic stimulus package President Obama has called the American Recovery and Reinvestment Plan. At an estimated cost of $19 billion, the $15,000 tax credit is very much like the $7,500 tax credit given to first time homebuyers. It will be a tax credit of 10% of the value of new or existing homes, up to a $15,000 limit and everyone would be eligible, not just first-time homebuyers (defined in the previous bill as someone who hadn’t owned a home in the last three years).
From a reader:
Check out the potential big changes to this credit…increased amount to $15,00, a proposed no repayment/recapture, plus a new 5% down payment requirement. Downside is it’s not really retroactive but meant for purchases after December 31st, 2008.
Original Rules:
IRS.govProposed Amendment introduced today into the economic stimulus package (two pages of Congressional record when the amendment was introduced in the Senate, February 4th, 2009):
http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2009_record&page=S1493&position=all
http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2009_record&page=S1494&position=all
Absolutely stunning… you almost have to buy a house now.
{ 117 comments, please add your thoughts now! }
Related Posts
 By Jim |
 Stumble It! Bookmark reddit.comTags: American Recovery and Reinvestment Plan, Barack Obama, Tax Credits Feb 04, 2009 | Read more in Government |
Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.
By “Much Like the $7500″ do you mean that it would be more of a loan and need to be repaid?
It’s a little unclear, they call it a “tax break.” But they also call the $7,500 a tax break… and, to make things a little more interesting, there’s a provision in the bill to make the $7,500 tax break an actual credit and not a loan.
It is a riddle, wrapped in a mystery, inside an enigma.
Is it retroactive I wonder? We just bought our house last Oct.
As far as I know, there is no repayment required. As for making it retroactive, it might be, but that doesn’t really make good economic sense. The goal here is to spend money to get people to buy houses. If you already bought, then there is nothing to be gained by giving you money. I know that this won’t be a popular opinion amongst people who bought last year, but giving money to people who already bought a house isn’t going to increase home sales.
Yeah, but it will allow some of us to KEEP IT and not go into foreclosure. Actually I’m not in any danger of that but many are i imagine. The idea keeps the folks barely afloat from losing theirs and gets others to purchase…It will help me make a 13th payment, send my wife to get a masters and invest the rest. Y’all let me know if you find out any more details…As in, do I need to wait to file my taxes until this is signed so that I get the entire 15k?????? Thanks!
If someone bought a house in the last year and they’re already going into foreclosure, I have serious doubts about their ability to manage money.
As i said, it isnt me but there are 1000’s I imagine that lost their jobs in the last 8 months and are depleting their savings with every mortgage payment, bills and living expenses. The 7500/15000 would help to offset that hit they have taken until they get back on their feet. To go in another direction….I wish they wouldnt have passed any of this stuff but if they are they need to get the most bang for their buck.
I get your point about the goal being to increase home sales. But if it’s an actual credit and if it means I get a tax refund, then I might spend that refund and that would help the economy. Right? Or am I missing something?
Wow. This seems like a gold rush idea. This will overload the mortgage system in a good way. Man, this gets me excited. Good find, Jim.
Check out the potential big changes to this credit…increased amount to $15,00, a proposed no repayment/recapture, plus a new 5% down payment requirement. Downside is it’s not really retroactive but meant for purchases after December 31st, 2008.
Original Rules:
http://www.irs.gov/newsroom/article/0,,id=187935,00.html
Proposed Amendment introduced today into the economic stimulus package:
http://thomas.loc.gov/cgi-bin/query/F?r111:1:./temp/~r111Ar22sE:e267980:
This is a very bad idea. Giving away $15K to incentivize home buyers will only serve to keep home prices too high… and while doing so take money out of the pockets of those who either already own a home or those who do not yet own and are not yet in a position to buy.
The best way to get people buying homes again is for prices to fall down do a level where they are more in line with incomes again. The best way for that to happen is for the government to keep out of meddling in the housing markets. These sorts of actions will only prolong the inevitable.
Exactly Phil. I have been on the sidelines happily renting waiting for house prices to come out of the stratosphere. A measure like this will only keep the prices high.
Unless prices come down to peoples income again we will find ourselves in the same position down the road. Overleveraged and overvalued is not a good combination. I would hope the last year has opened peoples eyes to this.
I bought my first home in sept 08 and I was going to do the $7500 tax credit. I planned on getting my taxes done next week. How long until this is finalized? Should I wait to do my taxes??
No, you will not qualify for this. It’s not retroactive to last year. They want to trick… err, I mean, get people to buy houses going forward.
Yes you will. We did and we bought our first home in July 08. Call a local tax office and ask them about the 15000 if you can reapply, I am also interested in the answer because I am already expecting the 7500 and wish to get the rest if I qualify. The 7500 I am receiving, however is as a credit, and due to be paid in increments of a little over 500 annually. Some people our sour, and I understand, instead of fighting the system, try using it to your advantage and take steps toward buying your own home. Visit your local real estate office, and they can help lead you into the right direction, even if it includes credit repair. You can qualify for this return even if you are a new home owner this year. Can’t quote me on it, but I believe it is first time homeowners only, between april 08 to june 09. May be off a month or two. Google it! You’ll find out more. Good luck.
The $7,500 credit is not it is cracked up to be. Around here we have many other first time home buyer programs 3% downpayment assistance or a lower interest rate. If you take one of these programs you are no longer eligible for the $7,500 credit.
Randy,
That is not true. I called the IRS on this. I purchased my home in July of 08′ with the down payment assistance and I was told I was able to do the full 7500 credit
I concur….that is not true… if you are a first time home buyer you qualify period…. I got a $4000 down payment assist on my home bought in Sept 08 and I have already received my tax return with the $7500 included.
when and how did you file…..I’m getting the $7500 I e-filed last monday and I’m awaiting my DIRECT DEPOSIt….why such a wait??
My husband and I purchased my grandmothers house last year after she passed away. We purchased it from her trust at full market value. We would like to file for the $7500 credit but can’t as you are not allowed to claim the credit if the home was purchased from a Parent, Grandparent, or Child. Will these rules change with the new homebuyers credit?
Like Lisa, I also bought a home last year- July 08. I was planning on doing the 7500 tax “credit.” Does anyone know if the 15000 would apply to me? Where can I find out?
I bought my house in June 2008 and qualify for the 7500 first time home buyers credit. I just finished and e-filed my taxes last night. If I am eligible for the 15000, then I am going to have to file an amended return. Ugh.
Can anyone tell me if, in addition to broadening the qualifications to all homebuyers not just new homebuyers, if they lifted the income ceiling for couples? Under the old $7500 break it was limited to couples making under 170K.
As far as I know that $15000 tax break (which you don’t have to repay) would only apply to home buyers who buys it after Jan 1 2009. All, The buyer who bought the house in 2008 are screwed.. What did you expect from this Govt.
Do they know that people who bought the house can get $7500 dollar and sell the house next day with even money. So they get to keep $7500.
Now, They are in the market again and buy the house again and get another $15000…OMG what is wrong with America
Sumit – I do not believe your statements are true. You cannot buy a house, get the $7500 and sell the house the next day. I believe with both the $7500 and the $15000, you need to own your house for at least 3 years or repay the money. I am not sure but I think I read that somewhere and it would make sense to me otherwise you would have people trying to take advantage.
Jen – I might be missing in the IRS document but it never mentions that you have to own the house for 3 years. Again. Who knows what’s behind the closed door.
How is the credit repaid?
Some exceptions apply to the repayment rule:
If you sell your home, all remaining annual installments become due on the return for the year of sale. The repayment is limited to the amount of gain on the sale, if the home is sold to an unrelated taxpayer. If there is no gain or if there is a loss on the sale, the remaining annual installments may be reduced or even eliminated. Taxpayers are urged to consult a professional to determine the tax consequences of a sale.
For the $7500 credit (actually a loan) you can not sell the house within 1 year.
http://www.irs.gov/newsroom/article/0,,id=187935,00.html
SEe the bottom QA:
Q. Who cannot take the credit?
it lists as one of the items :
You sell your home before the end of the year.
The 3 year test is whether or not you’ve owned a home in the past 3 years. If you have you are not a first time buyer.
So if you sell your home in the even price after 1 years and hurt for new house you get another 15K (If the bill gets passed which I have no hope). Wow.. It’s nice to break a system if you can.. LOL
So It means if you closed the deal on Aug 1st 2008 then You can put sell the house after Aug2nd.. If you sell the house in the even prices.. then you get to keep the $7500 dollar.
Wow.. Why not buy another house and get another $15000 (if this one goes thru Congress).. haha there’s always a way to break the system…Go America I love you
LOL
Sumit – are you even looking at the messages? If you bought a home in 2008 and sell in 2009, and then you buy another home in 2009 you’re not going to be eligible for the $15,000 break.
Sumit – I’m not sure about the new policy, but the old $7500 had to be paid back over the next 15 years ($500 per year), or the remainder when you sell the house.
The cost of selling a house is much more than $7500. It doesn’t matter you need to pay back or not. You’ll end up having a loss.
Is this really true? One could sell the house they bought last year and buy another this year then get the $15000?
I’ve read conflicting statements on the retroactive part of this bill. Some are reporting its an ammendment that is retro some are saying this year only. Who knows?
I’ve read alot of conflicting things sbout this – so I guess we will just wait and see. I bought a home on December 30, so this could potentially be huge by 2 days ($7500 “loan” vs $13,000 “free money) .
What are they giving everyone that was responsible and got a house they can afford? My husband and I put 20% down on a house we purchased in May of 2008 but we do not qualify for anything because we were not first time buyers and now I see we got it too early. Does not give much confidence to those responsible.
Do you know if this would include building a new home in 2009?
We closed on our home Dec 18, 2008. So not only did we get hosed out of the 1st time buyer credit (we already had a house), but now we’re missing out on this $15,0000 by less than 2 weeks!!!!!!!
I swear most of that money would go to buying new appliances or other projects for our new home. So it would actually go back into the economy the way they want it to. And yet we’re totally screwed instead.
This is what happens when the government messes with the housing market. People feel screwed. It would be better if the government stayed out of it and let home prices fall back down to reasonable levels. As it is they’re just prolonging the inevitable. I will wait until about 2012 before I consider buying – who know, by then maybe they’ll be offering a $30K tax credit and a 2% subsidized interest rate?
I am a tax pro at H&R Block and feel I must clarify the misconceptions about the First time homebuyer credit.
The $7500 credit is essentially an interest-free loan that is paid back over a period of 15 years from your taxes. Every year after you recieve this credit your tax liability will increase by $500 to repay the loan. Now if you hardly make anything and usually get a several thousand dollar return every year you will actually no be paying anything out of your pocket to pay this back. You will just recieve a return $500 less than usual.
Also this credit only applies to those who have purchased their first home between April 8, 2008 and July 1, 2009.
Also, if you end up owing taxes this year than your credit will be reduced and you will not recieve the full $7500. The IRS always takes what’s owed to them FIRST then gives you your return.
So my advice to you is make sure it is in YOUR best interest to take this credit before you actually do it.
Mellisa — Do you know if there’s any requirement to sell the house? When can you sell the house? I don’t see any detailed information in the IRS document. Any help would be appreciated.
Melissa, if that is the sort of advice that H&R Block give, then I’m glad I do my own taxes. When exactly would it not be in your best interest to take a $7500 interest free loan? If you’re worried about having to repay it, simply take the money and place it in an interest earning account, that way you at least make some money out of it. An interest free loan is basically free money, when you take account inflation over the 15 year repayment period. Anyone would be a fool not to take it.
DR-IHA, why are you attacking a business for something it’s employee said. Melissa can answer a lot of the questions about the homebuyers credit. what she said was right about your credit increasing every year so therefore you will never miss the 500 dollars. for those who just brought a home that didn’t qualify for the 7500 rent your home and buy another one or be a very good american and sell your home at cost and purchase a new one that way you can enjoy the credit and another american homebuyer can.
DR-IHN,Melissa didn’t say not to take the credit she only stated to make sure this is something that would benefit each persons needs. By the way if you read and interpet your taxes the same way you did these comments; I would be going to HR block to ask for a $29 second look on those taxes you do yourself.
All,
The $15,000 credit (or loan or whatever) has not been completely passed into law yet. Its quite possible there could be further amendments to the bill or that the bill could die entirely.
If/when the bill is actually made into law then I’m sure we’ll see documentation from the IRS and/or other sources that explain all the details with a full QA. Till then we don’t really know what the details will be and its not even a law yet.
What I don’t understand is the $7500 credit applies to people that bought a house between April 2008 and July 2009. How are they going to amend the dates? Now the credit is for people that buy in 2009. So the $7,500 would be for people that bought between April and December? I bought in August and could definately use the extra $7,500. Giving people 15,000 for buying a house is just going to make people want to buy a house to get the money when in reality can’t afford the house once the 15,000 is gone. Then what?
Most people who are that irresponsible won’t be able to qualify for a loan anymore. Times have changed for the better.
Well lucky me – I can 1 up everyone on here.
I closed on my house December 30. Yep – If I would have waited TWO WHOLE DAYS, it looks like instead of getting $7500 that I have to pay back, I could have gotten $13,000 ($132,000 home) that doesn’t need to be paid back!
Yep, it pays to wait. This irresponsible government will just keep offering more and more incentives to try to prop up the housing market. Next year the deal should be even better… and the year after that, etc. I’m going to wait for the $30K home buying tax break that’ll be coming out in 2012.
Phil, will you please kindly shut up? We all can tell you don’t like our government so do us all a favor and be quiet and move to China or something.
You are dreaming fool!!!!
I filed my return and got back my 7500 tax credit. I contracted on my home January 10, 2009. I have already filed my taxes and got a full refund. Can I refile if this goes through and get the additional $7500. Mark
I am in the same boat you are. I e-filed my taxes last night and qualify for the 7500 credit. I bought my house in June 2008. I am guessing if we end up being eligible – we will have to file an amended return.
I’m in your exact boat too, Luke…buying in June ‘08 and already receiving the $7,500 credit. I think Jim has it right…it’s not even law yet, so there’s no use worrying just yet. I heard it would “sunset” the existing $7500 credit. Anyone know what that would mean? Oh yeah…I won’t worry just yet!
I closed on my house on 29th of january 2009. I think I should be able to get 15000.
We are closing on Feb 18 2009 with our loan already in process we went fha and put 3.5% down what happens if they pass the new bill by the closing time does that mean we forfeit both the 7500 since it will no longer be effective and we wouldn’t qualify for the 15000 because we have a 3.5% down payment instead of 5%? Is there a time period where the two plans will overlap allowing the people already in process to take advantage of the 7500 still? also I didn’t read where the new bill tates you that you have to have put down of 5% to be eligible help what do we do????
We’re in the same boat. I printed the proposed amendment and read every line, I don’t see anywhere that it says you have to put 5% down. We are also going FHA & using Florida Assist for the down payment & closing costs, I hope this doesn’t affect us. Good Luck to you too!
write your senators. the amendment should be retroactive, let them know.
I closed my house on Jan 21, 2009. I called the Senator’s office and was told the $15,000 doesn’t apply to me. The purchase must be made within one year of the legislation’s enactment.
Wait 10 more days and you would know for sure..
I’m just out of college and i’m interested in purchasing a home. Can someone explain this tax credit to me? So when I file my taxes next year I get a $15000 return? Or, do they just deduct $15000 off of my AGI which in turn lowers my taxable income?
02/05/2009 – Specific information is not out yet on the $15,000 credit yet because it still needs to pass thru congress which should happen in the next 10 days or so. Heres a link to a good websit with some info http://isakson.senate.gov/press/2009/020409housing.htm on this site they say the new credit will sunset the $7,500 credit so by “SUNSET” I think they mean will get rid of the $7,500 and replace it with the $15,000 so I think this means the time period will probably continue to be in the range of April 2008 and July 2009 to qualify or the end of 2009. If they didn’t do this the only other option would be to give people that purchased in the early part of 2009 like Jan-Feb etc the option to do either the old $7,500 credit or the new $15,000 credit because they would qualify for both and they couldn’t just take away the old $7,500 credit for all those people that qualified who bought in 2008. So the point i’m getting at is if the credit is going to be revised from $7,500 to $15,000 and is not a new and separate credit then they would have to include all of those people that qualified for the old $7,500 credit in 2008. They wouldn’t just get rid of the $7,500 and say that now all those people in 2008 no-longer get anything and now it’s revised to $15,000 but only for people in 2009.
That makes sense. The original idea for this tax break was brought to the senate on Mar. 17, 2008 so it should make everyone after that qualify for the different amount. Especially if, like you say it replaces the previous credit. I suppose amendments would be necessary, but don’t fret, receiving the money, incrementally just might help push a lot of you to the top! Spend responsibly!
Anthony.. I think it’s all speculation at this point because we don’t even know what’s going to happen when it goes to Congress. They might wipe out few things or add few more things.. Who knows.. Only God knows
I agree with you, I believe it is retroactive until last april. I dont think they would make people who bought houses april to dec 08 payback the 7500 over the next 15 years.
Horrible decision that will only add more fuel to the fire.
The idea is for people who currently own houses to stay in them and not forclose.
Let’s clear up the confusion – as proposed in it’s current form, the $15,000 tax credit is NOT retroactive to April 2008, as the $7,500 interest free loan was, OR till January 1, 2009. It runs from the date the bill is passed for one year. Here is a link to the bill as currently proposed:
http://isakson.senate.gov/Amdt_106.pdf
There is no income cap, and it’s available to everyone, not just first time homebuyers.
Adam, that’s not fair it’s like buying something at a store at full price and than it goes on sale a few day’s later and you dont get the saving. i hope people see how unfair this is.
How is that unfair?
So if I buy a car for 20K last year and now that same car is 10K I should get 10K back from the dealer?
saladdin
Some of these comments are ridiculous. Way too many people whining that they should be eligible for this credit because they bought last year. Why would that make sense? You bought your house already…hopefully it was a good decision and you can afford it. You made that purchase knowing what the conditions were at the time…live with it and don’t cry for your portion of the handouts.
Overall, I disagree with the government getting involved so much. The various stimulus packages are just creating more and more people and businesses who are looking for handouts and believe that they are owed something.
I don’t think there is anything wrong with feeling upset at the fact that you missed out. We are getting the 7500 tax credit because we closed on Dec 23, and we really appreciate it! Even having to pay it back, it’s a great deal of help, but come on…Now they are giving people twice as much…and they don’t have to pay it back??
That’s like you standing in line and paying $500 for a laptop that you can use and return in a week, and then the person behind you and everyone else gets Free Laptops that they can keep. It’s only naturaly to feel upset.
So you should get overyourself, because it’s not fair and thats why people are upset, and WE have a right to be upset! So do those who missed the tax credit in March by a few days and those who will miss everything because they don’t have a 5% downpayment. IT SUCKS!
I’m with RS on this one. There has to be a cut off date for this $15,000 (even the $7,500) otherwise where do you stop? If you start allowing people who bought their home a month prior to either break going into effect then the people who bought their home one month and 1 day before will be complaining.
Think of it this way, if you got the $7,500 and don’t get the $15,000 then you’re way ahead on people who bought their homes and received no break.
It pisses me off when people bitch that someone else got the better deal when there are others out there who got no deal what-so-ever.
Oh and if I buy a laptop, return it and find that all the people behind me are getting free laptops – sorry that I’m not a whiny little kid like you think I am – I accept that I missed out on a good deal because I wasn’t in the right place at the right time.
Life isn’t always fair – suck it up and deal with it.
Does anyone know if there is a carry-forward program on this or how this works exactly? My husband and I are starting to look to buy our home, but we don’t make enough to send more than around $12,000 to the government in taxes a year. I am just wondering if that means I only get that amount, or what, or if the tax liability can “carry-forward” until we get the 10% or $15,000. Thanks
I would like to echo Graig’s comments from above. Do you actually get a $15,000 check in the mail or a reduction off your income? I am closing in March, 09 and I am getting an FHA loan and putting down 3.5%. Am I no longer able to qualify for the $15,000 because it’s not 5%? Thanks.
It has to be at least 5%.
I keep hearing about the 5%, but cannot find anything in the senate version about 5%. The original 7500 credit did not have that requirement for sure. Where is the wording that states 5%?
Does anyone know if they will raise the ceiling on the $15,000 tax break? I know for the $7,500 it phases out at $170,000 for couples. My husband and I made slightly over this amount in 2008. If we cut back this year and made $169,999 would we be eligible?
Here is an article that seems to answer most of the previous questions: http://www.usnews.com/blogs/the-home-front/2009/02/06/the-15000-home-buying-tax-credit-6-things-to-know.html
My thoughts are, It is a good start. Many of us believe that the home-buying industry led us into this recession, and it will lead us out. The only problem I see is this: if more credit doesn’t start becoming available, will very many people be able to take advantage of the $15K?
I bought my first house in May 2008. I qualify for the $7500, but as I understand it we might have to pay this back over the next 15 years. Has there been any new information on if they will make the non-repayment retroactive???
Damn it. There’s no way they’re going to make this retroactive are they? What timing…boo!
Eric, they’re going to have to make it retroactive why should some people have to pay for the 7,500. and the other’s get the 15,000 for free. and how do you get the dates right 04/08/2008 to 07/31/2009 and the new one will start to be law in or round 02/20/2009. there is a overlap isn’t there that’s not fair to us that bought a home in 2008 /or early 2009 is it.
just to make a note: The $7500 is suppose to start getting paid back 2 YEARS after you file your taxes, so I filed this year and won’t began paying it back until 2010 and won’t be through until 2025!! somebody tell me if I’m wrong…but I think I’m right…
Actually, You would start paying in 2011. or whenever you file 2010 TAX return
Hmm… as a good ol’ American, I always like finding ways to legally cheat the system.
I purchased my home in December of 2008, so as it stands, I will be getting the $7,500 tax-free loan. The home was purchased solely in my name.
Given that everything else works out, couldn’t I just simply sell my house to my fiance, my parents, etc in 2009? And they/I get the $15,000 credit?
Seems to good to be true, and I’m not sure this bill will go through without numerous amendments.
sorry buddy but you cannot sell your home for 2 years after purchase or you’ll forfeit the 7500. Besides, according to Johnny, the new bill, if approved, would sunset the 7500.
Joe,
Have you heard if the $7500 would be a true credit and not have to be paid back???
Joe. According to IRS Document.. You can’t sell the home within 1 years.
Q. Who cannot take the credit?
it lists as one of the items :
You sell your home before the end of the year.
actually, you don’t qualify for the tax credit if you sell your home before 2008 (which has passed) you still, however have to pay back the amt in interest free installments of 500 per year. If you sell the home to someone WHO isn’t related to you, the repayment in the year of sale is limited to the amount of gain on the sale. When figuring the gain, reduce the amount of the credit you did not repay.
So does this mean by ’sunset’ the old $7500 credit by the new $15,000 credit non-repayable, that the $7500 will be non-repayable also???
Where does it state that one would not qualify if they put less than 5% down?
Here is the link for the proponent of the bill, http://isakson.senate.gov/press/2009/020409housing.htm it doesn’t mention anything about a 5% down payment requirement. We’ll see in about 10 days
I just bought a house and it sucks that I will not be included in this. I still think that something else should be done besides giving people further incentives to buy a house. As others have stated, it is only going to drive the prices up again and could cause more people to buy a house when they are not quite ready yet.
I agree with Phil that the government should not pass this law. It would only artificially prop up the value of real estate with borrowed money. That’s exactly what got us into this mess. I am currently a renter and, like many fellow renters, I am heartened to see stratospheric home valuations finally realigning with the public’s not-so-stratospheric gains in real income. Let prices do what they’re designed to do…balance supply and demand. A better, cheaper way to help people get into home or to stay in them is for the government to reduce the cost of borrowing by backing loans to people with good credit. This would reduce the rates on these loans. The government might also offer some down payment assistance (say, 3%) so long as the borrower pays at least 5% down. As for people with bad credit…they should not now and should never have gotten loans in the first place.
I don’t understand the point behind complaining about the government in reference to the $7500 credit, which has been stated, is actually a loan. Why is Phil and Matt so bent out of shape. The real estate market has already declined significantly. 50% + in some areas. What more do you want? Prices can’t drop too much more or else there will be no movement in the market because people CAN’T sell. They’ll lose all their equity.
Furthermore. . . this is a NO INTEREST LOAN. You can’t find money that cheap and it’s to be repaid over the course of 15 years. That’s a great deal. It’s free money AND the government doesn’t lose either. It’s a win win. Now. . it will be different if the $15K incentive is put into law. That’s a handout, but if it get’s the economy and the housing sector moving. . . so be it.
$15,000 Home Buyers Tax Credit Brings 15,000 Questions – and no answers
Wednesday evening’s post, Senate Approves $15,000 Tax Credit for Home Buyers, has generated a flurry of phone calls and emails from home buyers, real estate agents and even the media. People have questions, and they want answers.
Understandable.
Here’s the problem. . . The stimulus bill hasn’t been finalized yet. The House has passed one version, another version is being worked on in the Senate. Once the Senate passes their version of the stimulus package (a vote is currently expected on Tuesday, Feb 10) it is still not a law.
Since the Senate version is different than the House version, the bill will have to go to a conference committee consisting of members of both the House and the Senate in order to reconcile the differences between the two bills – and here there would be more opportunity for changes to be made.
There is no $15,000 home buyers tax credit – YET
THEN the bill goes back for voting. Assuming passage by both the House and Senate on the reconciled bill, it would be sent to President Obama for his signing into law.
Whew. It’s an involved process, and can be lengthy. Obama’s made it clear that he wants a bill to sign by Feb 16. Whether he gets that, only time will tell.
Everything I’ve read indicates there will probably be some sort of home buyers tax credit in the final stimulus bill. The details however, are subject to change.
So since there isn’t a Stimulus Bill even past the conference committee stage, there really isn’t much point in answering questions on what may, or may not, be in the final bill.
We’re just going to have to wait and see what the final bill looks like.
So this credit for homebuyers only applies to homes purchased between December 31st, 2008 and April 15, 2009? What the hell kinda break is that? How does this help all the folks who are burdened with tax liablity they can’t pay due to the economic downturn in 2008? make it retroactive to the 2008 tax year and it makes sense, otherwise, this is just blatant spending of money the government doesn’t and won’t have.
OK, Now I get it. It’s for homes purchased in the next year and it’s taken back if no home is purchased or if the purchased home is sold within 2 years of purchase.
Still… No tax credit for us folks who apparently should have rented. Now THERE’S stimulus for the housing market!
So if you are a first time home buyer, buying a house after January 1st, 2009 you are eligible for both the $7,500 and $15,000?
NO..BIG NO..
NO Bones….If you bought the house already you may be eligible for $7500..AND REPAY IT..If you wait to buy till after Obama signs this bill into law you may THEN be eligible for the $15,000…AND NOT HAVE TO REPAY IT IF YOU STAY 2 YEARS…
I want to have a house built this year and live in it as primary residence. But, I am keeping my old house for my parents to move into. As the bill is written now will it treat my new home as a second home even though I’m going to live in it? Also, does the $15,000 credit apply to homes you are having built or just to existing homes on the market?
$7,500 is a Refundable Credit. The $15,000 is not. So the most you can benefit from the $15,000 credit is the amount of your tax liability for the filing year and the most you could get back is the amount you paid in during the year.
You can get the $7,500 back even if your tax liability is $0.
I kind of hope that the amendment gets changed so that if you qualified for and took the $7,500 you can be eligible for another $7,500 but in both cases it’s just an interest free loan. That seems fair.
So this is all on a go forward basis, right? My best bet, having bought my first home in July 2008, is to do the $7,500 credit, right? Thanks!
Hmm, didn’t see the 100 comments at first — nevermind!
Found this information on bloomberg:
Asked what a proposed $15,000 tax credit for homebuyers looks like in the compromise plan, Baucus laughed and said, “not much.” He said that proposal has largely been dropped, though he didn’t provide details.
Negotiators all but eliminated the biggest tax cut for businesses, a provision that would let companies convert losses into tax refunds, Baucus said. He said the provision, which would have let companies claim an estimated $67.5 billion in tax refunds this year and next, was sacrificed to help keep the final package under $800 billion. A proposed $15,000 tax credit for homebuyers was reduced to $8,000, Baucus said.
I wonder if they kept the provision on making the old and new credits non-refundable.
All the detail should be here by Saturday or Friday Night..Let’s see who’s the Winner.
regarding tax breaks for home buyers:
Does this mean I can expect to actually receive money of up to $15,000? Supposing my home is valued at $190,000 when I purchased it last June 2008, how much am I suppose to receive as tax break? And again, will I actually receive the money?
can anybody please enlighten me on this?
If you bought the house in 2008 even on Dec 31st 2008. You are not part of the new Stimulus plan..New stimulus plan start from Jan 1 2009 thru Dec 31st 2009. Also, You don’t have to stay in the house for 3 years.
Also, $15000 has been cut down to $8000.
Temporary credit for home buyers: The bill increases the size of an existing temporary and refundable first-time home buyer credit to $8,000, up from $7,500. It also removes the requirement under current law that the credit be paid back if the buyer stays in the home for at least three years. And it would extend the credit’s expiration date to Dec. 1, 2009, from July 1. Those eligible for this credit must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009.
The full credit is available to those making $75,000 or less ($150,000 for joint filers). Estimated cost: $6.6 billion.
I read this article also. I qualified for the $7500 and have claimed the $7500, but the way I read this the whole credit is now non-refundable, for the people who claimed the $7500 and for the people who will claim the $8000.
I find it very hard to believe that they will make it non-refundable for everybody. What do you think????
sorry correction on my last sentence.
“I find it very hard to believe that if they make in non-refundable for one that they won’t make it retroactive for the people qualified for $7500″
I closed on a new home in June 2008, but sold a condo i owned in August 2007. I am married and meet the AGI income requirements. UNDER the new law will it remove the “owning a primary residence in the last 3 years” requirement, even if i purchased in 2008 ?
THANKS !!
Tim
can i apply for the 8,000 as well 7,500 or can you only get one ?
How do i apply for the $8000
I have ownership of a townhome for the past 28 years. My father originally put the downpayment down, and for several years I paid all of the mortgage payment. Then my father and I signed some papers making me the owner. Is my father the owner, and am I a first time buyer. I never bought the home to begin with, just make payments then I became the owner. I am trying to get to Vermont in 2010. Would I qualify for the $15000 om 2010? Or would I be disqualified from the tax break. I do have the papers signing the property over to me after a few years from my father’s name to mine. Please help and e mail me right away about these questions, and concerns. It will help me so much. Waiting in gratitude. Nancy Kelly