Home Buying in Oak Park>Question Details

Shawn, Other/Just Looking in Oak Park, IL

Homebuyer's Tax Credit Bait and Switch

Asked by Shawn, Oak Park, IL Fri Feb 6, 2009

OK so on 02/04/2009 Isakson pulled the carpet out on anyone who has purchased a house this year so far, AND anyone buying in the next week or whenever before the bill is signed into law. This is making a mess for anyone that just bought a house or who is closing today. I bought 3 weeks ago. ALL Realtors and ALL title companies should cancel ALL closings until this bill passes. You are ripping 15K away from buyers by continuing and it is bad business. I closed just before this came to congress. The problem is that the announced bill was put on the table Mid Jan and had all homes sold after December 31. So many people probably went to closing in the last couple weeks thinking the tax credit was coming to them only to have it pulled out from under them. I'm sorry but this is just not very good for the chunk of us who just bought. I have contacted my congressmen but I'm sure nobody cares now.

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8
Shawn
you are right Congress should make tax retroactive to the first of 2009.
to be totally fair, thye should roll this back to the passage of the $7,500 credit and make it ALL a credit and not just a no interest loan.
logically, why should a buyer who closed Dec 31, 2008 be different than a buyer who closed Jan 4, 2009?
pls be aware that the income limits in high costs areas effectively eliminate the credit for many buyers.
Arn
1 vote Thank Flag Link Fri Feb 13, 2009
Maybe this will help. Approved and on the books is a $7,500 tax credit that will be paid back. If you took advantage of that...then your done. Approved by the Senate but not approved by the house is a stimulus proposal to take it to $15,000 and not have to pay it back. Not approved...but in the house.

It's something like the price of gas....do you fill up today or wait and see if it drops tomorrow? And because you filled up yesterday at $1.98 a gallon and it dropped to $1.59 today...don't think you can pull in and ask for the difference.

Laws and tax credits change...our world is constantly changing. The good news is...the human being is the most adaptable creature on the planet! :)
1 vote Thank Flag Link Sat Feb 7, 2009
Hi Shawn - Based on the updated bill passed by the House, you might be in luck! The new version extends the tax credit to eligible purchases made between the start of this year through December 1, 2009. The tax credit has been lowered from the Senate-approved $15,000 to $8,000, but unlike the current law from last summer's housing bill, the credit doesn't have to be repaid.

Now let's see what actually gets signed. We'll be tracking it closely on Trulia Blog, and I'm sure more people will be talking about it on Trulia Voices!
0 votes Thank Flag Link Fri Feb 13, 2009
Shawn,

I've attached a link to the WSJ's latest article on this. It is followed by blog post with some good commentary.

Look at the bright side. You probably still got a great deal, and are getting the $7500 credit to boot. Once this stimulus goes into effect, prices will likely rise with demand. Beyond all that, it's all still just hot air until they sign something, anything, into law.

I do empathize with your position, but there are a lot more good hard working people out there with much more serious financial injuries from this market. They can point to poor ethics, regulation and legislation as well.

You'll be fine in the long run.

Enjoy the read. Post to the blog...
0 votes Thank Flag Link Sat Feb 7, 2009
I agree with most of that.

If a gas station said we are giving away free coffee for life if you come in and prepay for a years worth of gas and you signed up for it....and then on the way down there they cancel the promotion but your still stuck with the gas bill...you would be disappointed. You wouldn't be getting screwed out of the gas...but I would still classify that as bait and switch.

Either way, I hope the bill helps our economy and I wish everyone luck with their home purchases.
0 votes Thank Flag Link Sat Feb 7, 2009
It looks like there was an attempt to mut a 5% minimum down payment to the current one outside of the stimulus. Not sure if it went all the way. Also, the senates version differs from the house by not making it a true tax credit but just reducing your tax bill by up to 15k. So you wouldn't get any actual money from the government just in many cases everything back you paid in. I don't think we can really guess whats going to come out of the congress one they meld the two versions together but as a homebuyer it seems like a big timing game on this as I just made an offer on a house.

Fingers crossed...
0 votes Thank Flag Link Sat Feb 7, 2009
So is the 10% rule still in effect for the 15k? You get 15k or up to 10% of the purchase price? And are they trying to retro this so the first time buyers that just bought get 7500 more? Oh this is a mess.
0 votes Thank Flag Link Fri Feb 6, 2009
The Housing and Economic Recovery Act of 2008 authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before July 1, 2009. I strongly encourage you to consult a qualified tax advisor or legal professional about your situation.
0 votes Thank Flag Link Fri Feb 6, 2009
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