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Explaining the 'potential' new Homebuyer Tax Credit

By
Mortgage and Lending MLS# 279272

I'm sorry I didn't post this IMPORTANT news earlier, but I've been very busy this morning. Last night, 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 principal 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 changes.  But this is an important step forward.

Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Interesting that the House Bill does not contain the credit, although I feel like some version of this will pass.

Feb 05, 2009 06:56 AM
Amanda Evans
DFW Living - Fort Worth, TX
Real Estate Broker - Fort Worth Texas

I read it that you cannot use it as a credit against 2008 taxes.  I need to read it again and see if I read it wrong. 

 

 

Feb 05, 2009 07:07 AM