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Update 2/12: The $15,000 provision has been replaced by an $8,000 first-time home buyer credit, according to the Wall Street Journal.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

    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????

    • Stacy says:

      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!

  2. matt says:

    write your senators. the amendment should be retroactive, let them know.

  3. charles says:

    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.

  4. Craig says:

    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?

  5. Anthony says:

    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 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.

    • LBJ says:

      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!

    • Sumit says:

      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

    • remy says:

      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.

  6. thomas says:

    Horrible decision that will only add more fuel to the fire.

  7. Alexander says:

    The idea is for people who currently own houses to stay in them and not forclose. 🙂

  8. Adam says:

    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:

    There is no income cap, and it’s available to everyone, not just first time homebuyers.

    • Glenn says:

      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.

      • saladdin says:

        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?


  9. RS says:

    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.

    • Starz says:

      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 says:

        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.

  10. EDA says:

    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

  11. Frank says:

    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.

    • Starz says:

      It has to be at least 5%.

      • krm says:

        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%?

  12. Sage says:

    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?

  13. Karen says:

    Here is an article that seems to answer most of the previous questions:

    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?

  14. Greg says:

    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???

  15. Eric N. says:

    Damn it. There’s no way they’re going to make this retroactive are they? What timing…boo! 🙁

    • Glenn says:

      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.

  16. Jerry706 says:

    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…

  17. Zack says:

    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.

    • Joe says:

      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.

      • Greg says:


        Have you heard if the $7500 would be a true credit and not have to be paid back???

      • Sumit says:

        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.

        • joe says:

          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.

          • Greg says:

            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???

  18. krm says:

    Where does it state that one would not qualify if they put less than 5% down?

  19. Patrick says:

    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.

  20. Matt says:

    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.

  21. Aaron says:

    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.

  22. ERIC says:

    $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.


    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.

  23. WirelessMike says:

    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.

  24. WirelessMike says:

    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!

  25. bones says:

    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?

    • Sumit says:

      NO..BIG NO..

      • cbas says:

        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…

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