$15,000 tax credit for home purchases?

[MarylandMark]

I found the text of the Nelson-Collins Stimulus Package, which is the so-called compromise package that the Senate seems to be headed toward passing. Here are a few of the details regarding this home purchase credit:


(1) The credit would be for 10% of the purchase price of a home which is to be used as the purchaser's principal residence. The maximum credit is $15,000.

(2) This appears to be an actual tax credit - not a deduction. So, the taxes paid would be reduced by $15,000, as opposed to having a reduction of the person's tax basis. I find this hard to believe, but based on the wording and the section of the IRS code that it is amending, it does seem to be a credit.

(3) It is for purchases made AFTER the bill is enacted, and within one year of that date.

(4) You can only receive one credit for such purchases.

(5) You can choose to split the credit equally between 2 years ($7500 each year).

(6) If you sell the house, or it stops being your principal residence within 24 months, the credit will be added back to your taxes.

(7) This credit would not apply in the case of a purchase from a spouse or pursuant to a divorce.

One thing to note though, I don't think this provision is in the House bill. So, it could be modified in the committee negotiations that will be needed to reconcile the House and Senate bills.

 

[Ratickle]

I read it too, and maybe they got something right? Hard to believe.......

 

[Sea-Dated]

What about those of us that already bought a home and are making their payments on time and never missed or been late on one?

 

[KENNYO]

What about those of us that already bought a home and are making their payments on time and never missed or been late on one?

Then that makes you a white republican!

 

[Sea-Dated]

Then that makes you a white republican!

You got that right. It just pisses me off that we don't get chit for being good and the people who default get homes given to them and tax credits and everything else under the sun to reward them for being irresponsible idiots.....:boxing_smiley::boxing_smiley:

 

[MarylandMark]

Trust me I'm with you on the why reward the idiots and what about me who lives within my means rants. I believe in personal financial responsibility almost to an extreme.

This program is for the ones that pay their bills because if you don't pay your bills there is no way you are going to get a loan these days. Money is tight and you have to prove beyond what you would believe that you can pay it back these days.

 

[mragu]

Then that makes you a white republican!

It is not just for the skells, it is being done for first time buyers and people who wish to upgrade. It may give a jolt to the housing market. BTW, I am a white republican who pays his bills:sifone:

 

[Madpoodle]

I thought it was for first time buyers only?

 

[VtSteve]

Comparisons on Homebuyer credits

http://blogs.wsj.com/developments/2009/02/09/faq-senate-stimulus-bills-home-buyer-tax-credit/


Readers are posing lots of different questions about the proposed $15,000 home buyer tax credit that’s in the Senate version of the economic stimulus bill. It’s important to remember that the proposed credit is far from a done deal. The bill still has a couple of big hurdles, including tomorrow’s scheduled vote in the Senate. (Read the Senate version.)

If it passes, it will have to be reconciled with the House version of the stimulus bill, which modifies an existing $7,500 home buyer credit, repealing a provision that requires buyers to pay it back.

There are some big differences between those two versions. The Senate version is nonrefundable, meaning you can only receive the credit if you owe federal income taxes. The existing credit is refundable, meaning you get a check from the government even if you don’t owe income tax. And the current credit applies to first-time home buyers, defined as anyone who hasn’t bought a house in three years. The Senate version is open to existing homeowners.

Here are some more Frequently Asked Questions. Please note that the answers may change as the Senate bill changes:

If I bought a home and used the $7,500 home buyer tax credit, can I retroactively receive $15,000 credit if it becomes law? No.

Are there any income restrictions on the tax credit? The Senate version currently has no income limits. The current $7,500 tax credit phases out on buyers with incomes exceeding $75,000 for individuals and $150,000 for married couples.

When will the new tax credit go into effect? The Senate version would take effect when the bill is signed by the president into law, and it would last for one year.

Can I take the tax credit this year? Yes. The Senate proposal would allow buyers — even those who purchase in 2009 — to claim the credit on their 2008 taxes.

The proposed tax credit is nonrefundable. What does that mean? You can only receive the credit to the extent that you owe federal income taxes. The Senate proposal would give home buyers two years to claim the credit, so buyers could claim a $7,500 credit in 2009 and a $7,500 credit in 2010. A family of four that makes less than $82,000, for example, could have a tax liability of less than $7,500 and they would not receive the full value of the credit.

Are there any repayment requirements on the tax credit? No. The Senate proposal does not require the credit to be paid back. The House proposal eliminates a 15-year repayment provision on the existing $7,500 tax credit.

If I am eligible for the current $7,500 credit, am I also eligible for the $15,000 credit? While the $15,000 credit has fewer restrictions than the existing credit, there is one big difference: because the credit is nonrefundable, if you have a low federal income tax liability, you could end up receiving more money with the current credit than the larger, proposed credit.

Are there any increased down payment requirements on the proposed tax credit? No. A separate measure has been introduced in the House that would expand the tax credit to $15,000 but would require a 5% down payment on mortgages. The Federal Housing Administration currently requires a minimum 3.5% down payment.

Can I use the tax credit to buy a second home? No.

How long do I have to live in my home after I purchase it with the tax credit? The Senate version requires buyers to pay back the credit if they sell the house less than two years after they buy it.

 

[Offshoredrillin]

Trust me I'm with you on the why reward the idiots and what about me who lives within my means rants. I believe in personal financial responsibility almost to an extreme.

This program is for the ones that pay their bills because if you don't pay your bills there is no way you are going to get a loan these days. Money is tight and you have to prove beyond what you would believe that you can pay it back these days.

call me back dork...and as for paying bills, I pay mine make plenty of money, but all these people have values and everything so f'd up, its like pulling teeth to get money. i'm not going to change the way I live to pay and additional 30-50 k a year in taxes.