It isn't official yet, but the proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit, whichever is less. To break it down, if youâ€™re buying a $150,000 home or above you could get a credit of $15,000. If youâ€™re buying a $100,000 home you could get a tax credit of $10,000.
Current law provides for a $7,500 tax break but only for first-time homebuyers. Purchases must be made within 1 year of the legislationâ€™s enactment, and the tax credit would not have to be repaid. It also seeks to prevent misuse by only allowing purchases of a primary residence and by recapturing the credit if the home is sold within two years of purchase.
Stay in your home as your primary residence for 2 years before selling which is a good idea anyway for the capital gains exclusion.
The amendment would sunset the current $7,500 housing tax credit on the date of enactment.
Senator Johnny Isakson of Georgia was pushing for a larger credit that would be available to all buyers of a primary residence, not just first-time homebuyers. He also wanted to extend the eligibility period to December 31, 2009 and waive the repayment requirement.
I hope that helps.
Jen Bowman, Broker Associate