This text refers to the original amendment to the stimulus bill, which has now been superseded in the final law. The first-time home buyer 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.
30-year fixed rate mortgages at 4% aren’t the only the only benefits the Senate wants to offer taxpayers as it has the chance to shape the 2009 economic stimulus before the bill is sent to the Office of the President to be signed into law. A number of amendments are on the table, designed to address the housing market by encouraging people to start buying again.
Here’s another amendment under consideration.
Senate Budget Committee Chairman Kent Conrad, D-N.D., said last week he would propose an expansion of a temporary $7,500 first-time home buyer credit so that it applies to all purchases of primary residences. Some Republican senators have called for an increase in the credit to $15,000. (CNN)
The current law offers a tax credit of $7,500 to buyers purchasing their first home. The tax credit is a loan that must be paid back over the course of 15 years, starting two years after the credit is taken. It only is available for houses purchased between April 9, 2008 and July 1, 2009. Individuals earning above $75,000 (or couples earning above $150,000) will see the maximum credit phased out.
Without an amendment, the 2009 stimulus bill would remove the requirement that the credit be paid back over time, as long as the house isn’t sold within three years.
Buying a first home is one of the most difficult purchases to make. In addition to learning about all the requirements of owning a house for the first time, working with real estate agents, and in most cases, hiring lawyers, first-time home buyers need to raise money for the down payment and other fees. Purchasing subsequent houses are often less stressful, and money is often raised by sale of the first home. There are many programs to help first-time home buyers, but help more from the government might increase the possibility of a quicker recovery in the housing market.
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 2, 2009.