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First Time Home Buyer Tax Credit to change to $8,000

So, what is happening on the government front now? Are we or aren't we getting the help we need? There are so many variables afloat and no one seems to know what the exact language of anything right now. The consensus is that one of the biggest items that we in the Real Estate industry have been looking for, the tax credit will not be what we want, but may be close. The current $7,500 first time home buyer tax credit is due to expire on July 1.

Details regarding the tax credit that have been released so far, the tax credit has been scaled down to $8,000 from $15,000, or 10% of the value of the home for any first time homebuyers who purchase homes from the start of the year until the end of November. It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years. There are still a lot of details about this plan to be released.

Getting the Real Estate business back to normal, is the most important thing that most of us on Active Rain are interested in, however, the current economic problems go far beyond Real Estate. I will continue to keep on top of what is happening in our arena.

Posted by Fred Chamberlin - Eugene/Springfield's #1 Experienced FHA Mortgage Consultant on 02/13/2009 12:06 PM

Comments (21)

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21 Comments on First Time Home Buyer Tax Credit to change to $8,000

FEB

Will this one take over immediately or replace the $7500.00 credit when it expires?

That is my understanding Leslie, but until the final bill is signed, it is actually, only guess work.

Fred,

Thank you for the info. I have buyers who want to know what is going on.

Ann Hayden in sunny Wildwood, Missouri

Thanks, Fred...I have a few first time buyers who have been sitting back waiting to hear just what is going to happen with the stimulus package.

HI Fred, What a smart way to 'stimulate' buyers getting into homes. Add to that the fact that it is a credit, not needing to be repaid unless the house is sold within 3 years of purchase. Good for our buyers and good for our economy.

FEB

Ann - There is so much posturing going on right now. But this weekend should give us the final information.

Chris - You are very welcome. The fence sitters are everywhere. If they would get off their rumps, maybe this problem would go away.

Marian - I think you are right. This is something that should work.

It was excellent to hear that it wont need to be paid by those who stay in the home >3 years. That seems fair to me, considering people shouldn't be buying homes unless they intend to stay that long in most cases. I wish they had extended it to all buyers, but in the end I think that job growth and economic stability is going to influence home purchases far more than tax credits and interest rates.

Thanks Fred but is this their Final answer? I wish they would do more about bailing the rest of us out.

Roland - I hope the final information comes out soon and it is at least as good as reported.

William - Probably not. If we can get stabilization, it will bail out the rest of us.

Fred,

I think they should have to put their egos away and listen to the people.

Ann Hayden in cloudy Wildwood, Missouri

I'm sure it will change.

I think they screwed up badly on the stimulus, but this is looking much better.

FEB

Evidently nothing is set in stone! What can change will change! Those making the laws have no clue as far as I am concerned!

Ann - Too bad we can't get some elected officials that will do that.

Tony - Distinctively possible, afterall, we are dealing with politicians.

I hope so Mike, I really do.

Bruce & Mary - I couldn't have said it better.

Fred,

I agree...if they would listen maybe we could get something accomplished..

Ann Hayden in Wildwood, Missouri

FEB

Good post and I think our questions were answered this weekend but the info that NAR sent out was pretty vauge about the tax credit. I thought it should have clarified if it takes over now and when it expires and who is eligible. Or it could have pointed us in the right direction to find that info. I have had to buyers use the tax credit that already existed and it made them very happy so any improvement on it will benfit all of us!

Ann - It is so hard to get politicians to listen to anything but their own voices.

Until we know the details, all we can do is our best guesses Sonya. I think that it will be retroactive for those that bought since Jan. 1, but not certain.

FEB

I've got some anxious first time home Buyers that I'm trying to tell what's going on with this credit. I guess we'll find out for sure today.

FEB

Ed - It appears to have ended up as stated above, $8,000 for those making less than $150k and not repayable if you stay in the home for 3 years or more. Also, it only goes through Nov. 1.

It's odd that the $7500 and $8000 tax credit periods overlap. I mean, who in their right mind would choose the $7500 at this point?

Elizabeth - It is kind of strange, isn't it. I know I would much rather have a $7,500 tax credit that I have to pay back over an $8,000 one that I don't. LOL

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