Senate Approves $15,000 Tax Break for Home Buyers

Karla--

I'm not a CPA or Tax Attorney so I can't interpret tax law for you but I can regurgitate some of the pertinent facts.  Basically, what we have so far (for Florida, at least) is an approved up to a $7,500 Tax Credit for first-time homebuyers who buy a home from April 9th or 11th? 2008 until about July 1st 2009, which is basically a zero % interest loan to the govt., payable in $500 increments per year for up to 15 years.  Other restrictions apply like singles cannot make more than $75K and married cannot make more than $150K...  That was well-explained by Elizabeth in her post above.  What they are trying to do is DOUBLE that amount, make it so that it will not have to be paid back, but that "stimulus package" has not been completely passed as yet. 

Here is what was posted by Kathi Moore, as given to her by one of her mortgage gurus:

This week, "the Senate added a significant homebuyer tax credit to the housing stimulus plan. Here are the key elements of the credit:

* The tax credit is for the amount of $15,000 or 10% of the purchase price (whichever is less), with the option to utilize all in one year or spread out over two years. The credit does not have to be paid back.

* The tax credit is available to all purchases of any home from date of enactment for one full year - no longer just a first time homebuyer credit.

* Able to claim the credit against the 2008 tax return

* Buyers must occupy the home for two years as their principle residence

* Includes a two year recapture provision (if they leave the home in two years they lost the credit)

* Purchases of homes by investors are ineligible

* Sunsets the previous $7,500 Housing Tax credit on the date of enactment

* The credit is not refundable. (The $7500 credit was refundable, but had to be paid back).

The bill is still working its way through Congress - The House of Representatives must still negotiate with the Senate, and the House bill does not contain the credit. So there may be additional."

I hope this info helps shed some light on an otherwise very confusing part of the stimulus bill.