$15,000 Homebuyer Tax Break

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Update 2/12: The $15,000 provision has been replaced by an $8,000 first-time home buyer credit, according to the Wall Street Journal.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:

Proposed Amendment introduced today into the economic stimulus package (two pages of Congressional record when the amendment was introduced in the Senate, February 4th, 2009):

Absolutely stunning… you almost have to buy a house now.

{ 117 comments, please add your thoughts now! }

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117 Responses to “$15,000 Homebuyer Tax Break”

  1. By “Much Like the $7500” do you mean that it would be more of a loan and need to be repaid?

  2. Jim says:

    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.

  3. Susan says:

    Is it retroactive I wonder? We just bought our house last Oct.

  4. nickel says:

    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.

    • will says:

      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!

      • Jim says:

        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.

        • will says:

          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.

  5. Susan says:

    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?

  6. PT Money says:

    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.

  7. Read On... says:

    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:,,id=187935,00.html

    Proposed Amendment introduced today into the economic stimulus package:

  8. Phil says:

    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.

    • Jay says:

      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.

  9. lisa says:

    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??

    • Phil says:

      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.

      • Anonymous says:

        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.

  10. Randy says:

    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.

    • Just another guy says:


      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

    • MplsEric says:

      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.

      • Jerry706 says:

        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??

  11. Helen says:

    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?

  12. mary says:

    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?

  13. Luke says:

    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.

  14. Linda says:

    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.

  15. Sumit says:

    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

    • Jen says:

      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.

      • Sumit says:

        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.

        • Jim says:

          For the $7500 credit (actually a loan) you can not sell the house within 1 year.

          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.

          • Sumit says:

            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

          • Sumit says:

            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

          • Do you even read says:

            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.

        • James says:

          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.

    • Derek says:

      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.

    • Chris says:

      Is this really true? One could sell the house they bought last year and buy another this year then get the $15000?

  16. Tone says:

    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?

    • James says:

      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) .

  17. Kelli says:

    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.

  18. Angie says:

    Do you know if this would include building a new home in 2009?

  19. Sammy B says:

    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.

    • Phil says:

      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?

  20. Melissa says:

    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.

    • Sumit says:

      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.

    • Dr_lha says:

      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.

      • Rodney says:

        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.

  21. Jim says:


    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.

  22. KBM says:

    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?

    • Anonymous says:

      Most people who are that irresponsible won’t be able to qualify for a loan anymore. Times have changed for the better.

  23. James says:

    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!

    • Phil says:

      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.

  24. mark says:

    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

    • Luke says:

      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.

      • Ken says:

        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!

  25. murthy says:

    I closed on my house on 29th of january 2009. I think I should be able to get 15000.

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