Latest on tax credit

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February 17, 2009 10:21am
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Benefits of First Time Home Buyer Tax Credit for West Virginians.

1. Effective for homes purchased January 1, through December 1, 2009.
2. Maximum credit amount is 10% of the purchase price of the home up to $8,000.
3. All principal residences including single family, town homes, condos and co-ops.
4. If the price of the home you buy is $80,000 or more, you will receive the full $8,000 Tax Credit to offset your income tax liability OR receive a REFUND for any amount up to $8,000 if your actual tax liability is less.
5. Income limits to qualify for the tax credit and or Tax REFUND is $75,000 for single filers and $150,000 for married filers. Married filers filing separately can receive a tax credit of $4,000 each.
6. First Time Home Buyer means a person who has not owned a principal resident for the past 3 years.
7. Eligible for home buyers using revenue bond programs for down payment or closing cost assistance.
8. No repayment required unless the home is sold in the first 3 years.

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February 14, 2009 1:39pm
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The stimulus bill has passed through the Senate late last night with the $8,000 housing tax credit for 1st time home buyers intact. Check out the link below for a detailed list of overall spending. Also, follow me on twitter for additional updates.

Complete List of Spending

The president will sign the stimulus plan into law Monday.

What's this mean for First Time Home Buyers?

The final provisions of the bill include:

1) Tax Credit
2) Restoration of 2008 Mortgage Limits

Tax Credit

The 2008 tax credit provision has been amended as follows:
1) Tax credit is increased to $8,000
2) The income limits remain the same: ($75,000 for an individual; $150,000 for a couple).
3) First-time homebuyers and principal residences only.
4) Tax credit is available until December 1st (previously it expired on July 1st).
5) Waiver of recapture (i.e. no repayment requirement) for properties purchased in 2009 prior to December 1st

• The provision is retroactive to purchases made on or after January 1, 2009.


• Recapture section does apply to properties sold in first three years.

6) Waiver of prohibition on financing by mortgage revenue bonds is included
Recovery_Bill_Div_B.pdf


FHA & GSE Mortgage Limits

Recovery_Bill_Div_A.pdf

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February 13, 2009 10:59pm
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First-time home buyers would receive an $8,000 tax credit, and they wouldn't have to repay the government later as is required for the current $7,500 credit. An earlier Senate proposal would have provided all home buyers with a $15,000 credit.

"The home buyer tax credit is a plus for the housing market, but only a small plus," says Mark Zandi of Moody's Economy.com. "The credit … covers only a part of the down payment needed to make a purchase. The housing market will take any help it can get, but it needs more."--USA Today article

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February 13, 2009 9:47am
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Housing tax credit as it stands:

1) Applies to first time homebuyers
2) Tax credit = $8,000
3) Must purchase a home between 1/1/2009 and 12/31/2009
4) Tax credit does not have to be paid back

Excerpt from politico.com on the housing market:


The housing market will have to wait for another day for its government help. Home builders and Realtors pushed for a $35 billion tax credit to support home sales. The heart of the package was a $15,000 tax credit to buy a new home, included in the Senate bill.

But it was eliminated from the stimulus in the House-Senate compromise. Instead, an existing $7,500 tax credit for first-time homebuyers was expanded to $8,000 and extended to the end of 2009. --Politico.com

See Politico's article, Winners & losers in stimulus fight, to see who came out on top and who didn't in the $790B stimulus compromise bill.
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February 12, 2009 11:21 am
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$8,000 tax credit for 1st time buyers (until August)

A $15,000 tax credit for anybody buying a home over the next year was dropped; instead, first-time homebuyers could claim an $8,000 credit for homes bought by the end of August. Car buyers could deduct the sales tax they paid on a new car but not the interest on their car loans. -- Associated Press

See the Associated Press for updates

$15,000 tax credit revisited

Congress chops tax credit from stimulus plan

The $15,000 tax credit proposed by the Senate has been voted down.

The tax credits were designed to boost home sales in a struggling housing market.
According to Joe Lieberman, it appears likely that a $7,500 tax credit will remain in effect.

The current tax credit provision carries income restrictions, phasing out at $75,000 for individuals and $150,000 for married couples. Eliminating repayment provisions would cost the government between $2 and $3 billion, while the larger $15,000 credit would cost an additional $35.5 billion.

If you want the 15K tax credit to pass (or fail) with the bill, you should let your representatives know by sending them an email.

Click Here to voice your opinion. I sent an email to Capito, Byrd, and Rockefeller in just a couple minutes thanks to the easy-to-use submit form.

Proposed $15,000 tax credit wiped out?

As it stands, the $15,000 tax credit for home buyers may be no more. According to the AP, "Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said. The agreement would allow taxpayers to deduct the sales tax paid on new car purchases, but not the interest on loans for the same vehicles."

It is still unclear as to what tax credit will remain, or if an increase over the existing $7,500 tax credit might be possible.

Stay tuned for updates!

Frequently Asked Questions: $15,000 home buyer tax credit

Key points about the proposed tax credit:

1) never has to be paid back (unlike the prev. $7,500 credit)
2) limited to primary residences
3) does not come with an income restriction
4) must live at property at least two years
5) applies to condos, houses, foreclosures, new, previously owned
6) credit could be applied to the 2008 tax year?

Here's some good information about the about the Senate version of the economic stimulus package offered by Luke Mullins at the U.S. News & World Report Home Front blog:

Q: I recently bought a home and qualified for the $7,500 new home buyer tax credit. Should this provision become law, would I qualify for it [as] well?

A: The short answer is no, says Rob Dietz, an economist for the National Association of Home Builders. "The effective date of the ... amendment is the date of enactment," Dietz says. "So if you've already completed a purchase, you would not be qualified for the new program."

Q: Isakson's press release reads: "The amendment would sunset the current $7,500 housing tax credit on the date of enactment." What does the term "sunset" mean there?

A: In this context, the term "sunset" means that the $7,500 new home buyer tax credit would be supplanted by the proposed $15,000 credit, which applies to all home purchases -- not just new homes. "If you are operating under the $7,500 [credit], that's the one you [have]," says Joan Kirchner, Sen. Isakson's Deputy Chief of Staff. "Then, from the date of enactment forward, the new one takes over and nobody else gets the old $7,500 [credit]."

Q: What are the odds of this provision becoming law?

A: The $15,000 home-buying provision is a component of the massive -- and increasingly controversial -- economic stimulus package. The House of Representatives has already passed its version of the stimulus bill, and the White House is putting pressure on the Senate to do the same. However, the size of the package -- which now totals more than $900 billion -- has prompted some Republican senators to try and slash provisions to lower the tab. Still, Kirchner argues that the $15,000 tax credit enjoys strong support from the National Association of Realtors and the National Association of Home Builders and will remain in the stimulus bill that is signed into law. "Because of the way that it was adopted -- unanimously, they didn't call a roll call vote because both sides agreed to accept it -- this provision is in," Kirchner says. Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, also predicted that the amendment would make it into the final package. "It’s a targeted solution that will address housing as well as taxpayers -- both of which need help," he said.

Q: Does this tax credit need to be paid back?

A: Nope. That's a key distinction from the $7,500 first-time home buyer credit, which was "actually a 17-year repayment, which translates into a no-interest loan," Dietz says.

Q: Is there an income limit or any other restrictions on participation?

A: The tax credit would be limited to primary residences and does not come with an income restriction, Kirchner says. "You must occupy [the property] for at least two years as your primary residence," she says. It applies to "any home, meaning a condo, a house, foreclosed, new, [or] previously owned."

Q: Can I take the credit during tax year 2008?

A: Yes, says Chris Cook, a legislative assistant to Sen. Isakson. Even if you buy a home in 2009, the provision would enable you "to file your taxes as if you purchased your home on Dec. 31 of 2008," he says.

Be sure to check me out on twitter.com to Get notifications about the economic stimulus package as it relates to real estate.

American Recovery and Reinvestment Act of 2009

I'll be following the American Recovery and Reinvestment Act of 2009, which could result in a $15,000 tax credit toward your first home purchase. This is exciting news for anyone looking to buy their first home. It also accounts for a large portion of the proposed $825 billion in taxpayers money. I'm still bringing in the facts as they come in.

As it stands, the House has voted on and passed the American Recovery and Reinvestment Act of 2009. Now it's up to Congress. I'm mostly interested in this bill as it applies to the housing industry. I'll be monitoring the proposal as it moves through Congress. Please offer any feedback or knowledge you may have to help educate others about this plan.

Also, check out my widget (top right) that tracks the status of the bill.