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Update 2/12: The $15,000 provision has been replaced by an $8,000 first-time home buyer credit, according to the Wall Street Journal.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