Home Buying in 94536>Question Details

Muthu Krishn…, Other/Just Looking in 94536

Senate OKs $15000 Bonus for Home Buyers...

Asked by Muthu Krishnan, 94536 Mon Feb 9, 2009

Is this for everyone or are there any income restrictions...do we need to pay back this amount ?

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Just released:

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.

Although this is not the final version that may be signed into law, it appears that this is closer to reality than the $15,000 credit turned out to be.

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Web Reference: http://www.carlmedford.com
1 vote Thank Flag Link Fri Feb 13, 2009
Are there any income restrictions on the tax credit? The Senate version currently has no income limits. The current $7,500 tax credit phases out on buyers with incomes exceeding $75,000 for individuals and $150,000 for married couples. There is no repayment requirement on the new credit - unless you sell within 2 years of the purchase.
1 vote Thank Flag Link Mon Feb 9, 2009
Muthu:

Tough times call for courageous measures. In just such an action, and with a resounding chorus of “Ayes,” the U.S. Senate voted on an amendment of the American Recovery and Reinvestment Act of 2009 (H.R. 1), that, if approved, would allow a tax credit of up to $15,000 for the purchase of qualified homes. This effectively doubles the existing $7500 tax credit and will help, hopefully, to pry open doors for more to be able to purchase a home in 2009.

Not only does this move increase the existing tax credit, more importantly it will include both new AND existing resale homes. This is certainly good news for builders.

If the bill passes through the House and is subsequently signed by the President, then 2009 buyers could look forward to qualifying for a tax credit of 10% of the purchase price with a cap at a limit of $15,000. This amendment would also give taxpayers the option of splitting the credit equally over a 2 year period.

Additionally, and possibly even more important, the change would be applicable to all buyers – not just first time buyers as has been the case with the old bill. In other words, the existing $7,500 tax credit has only been accessible to first time buyers. The proposed amendment allows ALL 2009 primary home purchases to qualify. There is the one significant caveat: investor based purchases will not qualify. Investors, those considered to be more financially secure in the existing marketplace, would still have to go it on their own with no credits. There are already existing tax breaks for those purchasing investment properties. These will remain in place.

If everything goes as planned, President Obama could sign this legislation into law very shortly.

How does this affect homebuyers? Many have been shell shocked by plummeting prices. We frequently hear buyers telling us that they are afraid to proceed for fear of loosing equity once they move into their home. For many, the money they invest in their down payment is the result of hard work and years of saving. They don’t want to take any risks they think could backfire, resulting in the loss of their hard earned cash.

It is hoped that in a climate of declining values and increasing difficulty securing financing, this move by the Senate will be the necessary impetus to move buyers off the bench and into the game.

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Web Reference: http://www.carlmedford.com
1 vote Thank Flag Link Mon Feb 9, 2009
Folks, sorry but the 15k credit is eliminated.
0 votes Thank Flag Link Wed Feb 11, 2009
Most people, even though they get a refund, still end up paying SOME taxes. This $15,000 will be a credit against any owed taxes AND, if the amount in one year is not enough to use it up, it can be used over two years.

Check with your accountant or tax preparer for full details.
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Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Wed Feb 11, 2009
I am not sure how the $15K is better than the $7500. The $7500 was money in the form of a check back to the home buyer. The $15,000 will be credited to federal income taxes for two years(only if you are some of the 38%) that owe and don't get a refund. For the majority of the population who gets a refund every year this will not benefit them. The only way I see around this is to change your deductions on our pay checks so we purposely owe federal taxes for two years to get the credit and then change them back.
0 votes Thank Flag Link Wed Feb 11, 2009
So as a taxpayer and buyer - how do you see this money? I am thinking you get a larger tax refund on your 2009 returns? On average - say for a 200K house - what will the buyer get and/or see? Sorry for my ignorance - just trying to educate myself and better understand.
0 votes Thank Flag Link Mon Feb 9, 2009
So, do we get a check of 15K for that or we reduce the amount of 15K in the income while submitting the taxes?
0 votes Thank Flag Link Mon Feb 9, 2009
Thumbs up,Carl for another great answer!
0 votes Thank Flag Link Mon Feb 9, 2009
Muthu:

"Additionally, and possibly even more important, the change would be applicable to all buyers..."

Last word is that there is no income cap.

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Web Reference: http://www.carlmedford.com
0 votes Thank Flag Link Mon Feb 9, 2009
There are no income restrictions. The amount is 10% of Purchase price or &15,000 (whichever is lower) and you do not have to pay it back over time.
0 votes Thank Flag Link Mon Feb 9, 2009
Thanks for the answer but still havent got answer for "does it have to do anything" with the income you make?
earlier they gave $7500 tax credit for income less than 75K right?
0 votes Thank Flag Link Mon Feb 9, 2009
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