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$8,000 First Time Homebuyer’s Credit

Posted By Jim On 02/12/2009 @ 3:00 pm In Government | 164 Comments

Are you sitting down? Do you have a pen and paper handy? Looks like the $15,000 tax credit to buy a new home [3] has been scrapped, saving $35 billion from the stimulus package, and replaced with an extension to the $7,500 and an increase of that credit to $8,000. The $7,500 first time homebuyer tax credit [4] was set to expire July 1st, this $8,000 provision would extend that. CNNMoney is reporting that the credit is available for those who buy a home between Jan. 1, 2009 and Dec. 1, 2009 (source [5]).

The cost of the extension and modest increase is pegged at around $2-3 billion. Another key provision? The repayment requirement will be nixed. That means the $7,500 15-year loan at 0% interest will now become $8,000 cash money in your pocket. I believe existing borrowers would have that loan forgiven.

Home buyers who hoped for a $15,000 tax credit to buy a new home, as promised by the Senate, will be disappointed. A proposed $35 billion credit to support home sales was jettisoned in favor of a more modest $2 billion to $3 billion provision.

The proposal would eliminate the repayment requirement in an existing tax credit for first-time home buyers, and raise the credit to $8,000 from $7,500. Congressional aides cautioned Wednesday that the credit’s size was still subject to negotiation.

Congress Strikes $789 Billion Stimulus Deal [6] [Wall Street Journal]

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[2] Email: mailto:?subject=http://www.bargaineering.com/articles/8000-first-time-homebuyers-credit.html

[3] $15,000 tax credit to buy a new home: http://www.bargaineering.com/articles/15000-homebuyer-tax-break.html

[4] $7,500 first time homebuyer tax credit: http://www.bargaineering.com/articles/7500-first-time-homebuyer-tax-credit.html

[5] source: http://money.cnn.com/2009/02/13/news/economy/stimulus_individuals/index.htm

[6] Congress Strikes $789 Billion Stimulus Deal: http://online.wsj.com/article/SB123436825805373367.html

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