This text refers to the original $15,000 tax credit amendment for all homebuyers which has now been superseded. The tax credit is now $8,000 and is available for people who purchase a house between January 1, 2009 and November 30, 2009. Here is how to claim the $8,000 home buyer tax credit on your 2008 or 2009 tax return.
As senators jockey for position and work to coming to an agreement that will best help the American people and the overall economy, the stimulus plan originally pushed forward by Barack Obama is changing. Last night, the Senate voted to include an amendment to the bill which would provide a tax credit for homebuyers. If the bill passes the Senate, and if this amendment remains included when the Senate and House negotiate, and if the President signs the bill into law, anyone who purchases a house after the bill is signed into law will be entitled to a tax credit.
The credit would be 10% of the purchase price of the house, up to $15,000. This idea is modeled after a $2,000 tax credit for homebuyers that helped the country rise from a recession in 1975. The credit would be spread over two years. For example, if you buy a house with a purchase price of $300,000, you would qualify for the maximum credit of $15,000. The first year you claim the credit, you would receive $7,500, and you would receive the remaining $7,500 the next year.
Additionally, in its current form, the requirement to repay the credit over time will be waived. The estimated cost of this amendment is $18.5 billion. This credit, which was once set aside for first-time homebuyers, would now apply to anyone who purchases a house, including investors, speculators, flippers, and any family struggling to afford a place to call home.
So does it make sense to go out and buy a house this year if you weren’t planning to, just to receive this tax credit? I’m not so sure. The main driver for buying a house — one in which you plan to live, not one you with which you plan to invest, or more accurately, speculate — should be necessity. Incentives for purchasing an asset stands to prop up the price of that asset beyond the price the market sets for it on its own. This boost helps real estate agents and investors more than families.
Please keep in mind that the plans for this credit are subject to change until it the bill is signed into law by the President of the United States.
Are you more inclined to buy a house this year with the knowledge that you will receive up to a $15,000 tax credit if this bill is signed into law as it currently stands?
Update: the current text of this amendment stipulates that only houses purchased after the bill is signed into law will qualify for the $15,000 tax credit. The final rules will depend on what the Senate and House of Representatives agree to before sending the bill to the President.
February 11 Update: As of this moment, the idea of the $15,000 tax credit may be nothing more than a dream. According to reports following the compromise between the House of Representatives and the Senate, this benefit has been “significantly reduced.” It may be another day before we know exactly what that means.
February 12 Update: The $15,000 tax credit has been confirmed as being “significantly reduced” to $8,000 for first-time homebuyers only and only houses purchased before the end of November will qualify. This $8,000 tax credit will not need to be repaid, unlike the current $7,500 first-time homebuyers credit.
February 13 Update: The Senate and House of Representatives have both passed the compromise version of the stimulus bill. Read the complete stimulus bill here, and you’ll be a step ahead of many of the congressmen who didn’t have a chance to read it before voting.
Updated February 25, 2009 and originally published February 5, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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Dear Democrats, thank you for caring for Americans, and out-vote those hate-ridden republicans. We will mobilize to vote these characters out of our offices. The next round, except for those that came in to support this bill, our aim should be to fire every republican official out. While Americans are starving and their livelihoods are disappearing by the day, these clowns are being paid with our tax money and simply playing bribery, favoritism for their high rollers buddies and hate-politics all day. We American are people of strength, pride and good moral standing who believe in decency and care for all; we are not Nazis and hate-filled, twisted losers and this, we will never be. We believe in God, fairness and opportunity to all.
We voted for Obama to get rid of these evil nuisances from our Government. And now we see, we still have some cancerous elements remaining. We shall vote all these bad elements out. We are also taking good notice of those democrats dressed in wolves’ cloths, who are clearly on those egoistic shit-heads’ side. Dear republican clowns, there is time for everyone and you’ll get yours soon. You cannot simply keep making mockery of the citizens that pay your salaries. Keep your hateful and fear-ridden policies to yourself and better start packing to leave. This world will be for all people, not just for the thieves, the selfish rich and for the so-called privileged; it’s for all people get it – all people. We will work hard to make sure America stays, as the best country in the world there is through our hard work, sweat, unity and care for all, not hate and playing the boogie fat man. We promise you one thing, we will vote you out.
JKing,
Aside from all your so called “Fancy” rhetoric, your comment doesn’t make any sense-AT ALL!!! Were you comparing Republicans to Nazi’s? I hope not! Democrats, if you know anything about history, are more like the socialists than the Republicans. Now I am far from thinking Democrats are Nazi Socialists, I am simply fixing your mistake. Also, is it simply the Republicans fault? Who ran Congress the last four years? I believe it was the Democrats. Another thing, Democrats believe in making sure EVERYONE gets the same thing. Including pay. Where is the hard work and competition that America was built on in that attitude? That’s what the communist and socialists did and look where it got them. Yes, some reforms need to be made; just as America has done throughout its time, but please don’t call the Democrats point of view a harder working one. HAHA! A free market creates that hard work and strong economy. An example of your “hard-working” democrats approach would be the union’s up in Detroit. Lazy workers making more than they earn. Killed the auto business here in America. Not all union’s hurt themselves this way. The skilled laborers actually WORKED HARD to get there trade and earn their money. I could go on and on. But hopefully you get the point.
So, JKing, you are a talented writer,I’ll give you that. However, leave the politics to someone else. You will do yourself a favor.
“Another thing, Democrats believe in making sure EVERYONE gets the same thing. Including pay.”
No elected politician in this country, Democrat or Republican, believes that everyone should receive the same pay.
Does anyone know if there still exists AGI limitations and phase outs like there were for the original $7,500? I have not been able to find anything on this. I may have missed that in previous comments because I just skimmed through.
I totally agree, my wife and I bought our house on October 17th 2006 for $120,000 at 6.5%. Our credit is outstanding. We have never been late on a single payment. We now have a child (three months), trying to live the “American Dream”. Really, we should see some kind of break. -James
I have read somewhere that there may be a possibility that if the home purchase was timed right a First time home buyer could take advantage of both last years $7500 tax credit that has to be paid back and also the new bill that would entitle them to an $8000 tax credit (that doesnt have to be paid back). Can anyone elaborate on the possibility of this being able to happen?? Is there a clause somewhere that states you cannot take advantage of both on the same home purchase?? When the new bill passed did it remove the old 7500 tax credit?? I ask these things because I have an offer out on a house and the purchase date may fall in an area that was still covered by the 7500 tax credit from last year, but also the new $8000 one. -Thanks for any information
How about if you are a first time home buyer, but we are building our first home. We started in Dec of 08 and will be complete in Jun of 09. We still have not completely closed on the loan yet. Would we be able to recieve the tax rebate?
Yes, as long as you close on the house before 12-31-09, you’ll qualify for the full 8k tax credit… Provided, that is, that you meet the income qualifications, as well…
I have a question. In July 2008 I bought a condo from my grandmother. I am a first-time home buyer. I pay a monthly morgage paymen to the bank. I paid fair market value. Under the old credit I was inelligible because I purchased from my grandmother. I can’t find any updated information on this. Would I be elligible under the new plan?
Unfortunately, the new plan is not making any changes for any houses that were purchased last year. Since you purchased in July, you’re only eligible according to the conditions of the old $7,500 recapturable credit.
Here here Floyd!!
Question…..If we buy a house this year and get the $7500 credit and then in less than 3 years have to sell because we are military and have to transfer will we have to repay it? It’s not like we have a choice in that matter, I think the Senate and President should take that into consideration also. If you don’t know the answer do you have a suggestion as to who I can address this question to?
Question……My husband is military and we bought a house at our current base 4 months ago. My husband just received orders to Korea and will be leaving in 4 months for a year. I will stay in our new house while he is gone but there is a good chance he will receive follow on orders after that to a different base and we will have to sell our house. But at this point it’s all up in the air. We are first time homebuyers and are worried if we claim the $8000 tax credit and do get orders to move in a year or two that we will be forced to repay it. So my question is do you have to repay the credit if you get military orders before you’ve lived in the house for 3 years? We have no control of this.
Looks like the credit could be extended to 2010 and bumped back up to 15K? Housing inflation, here we come.
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