This is just fresh off the grape vine. Congress is deliberating upon a package of items which would give a push to the housing market nationally. This incentive will give a major discount to the would be first time home buyers. The thing that caught my eye was that the bill, if it passes the floor of the house, would give a $8000 credit to the couple buying their first home and about $4000 to a single person if they buy a house.
The amount for the 8000 tax credit first time home buyer deal may sound small but consider that perhaps 4% of the population buys a home. That would mean 14 million buy houses. Now if you multiply that number with this tax credit break, it gives you an idea on how much money is going to be involved in this “8000 tax credit first time home buyer” deal. Not a bad sum by any means.
8000 Tax Credit First Time Home Buyer
And 4% is just hypothetical. The actual number may turn out to be even larger because of lot of population of renters is sitting on the fence looking to see which which way the housing wind blows.
For important information, Click Here > 8000 Tax Credit
According to the Initial plan for the “8000 tax credit first time home buyer” by the Obama administration, there was going to be a $15,000 tax credit for the new home owners but because of trying to make it a bipartisan effort and bring the Republican counterparts on board, the administration had to curtail it at $8000. According to the political hacks, the deal is still negotiable.
The federal tax credit program for home homers has been designed to cover qualifying home purchases between April 9, 2008 and April 1, 2009. But from what I know, there are going to be some restrictions and limitations attached. Keep an eye for those tiny asterisks which accompanies such things.
Assuming you qualify (buyers in previous year will be discounted),
1) The sum of your housing credit, and it changes every year, will be divided by two and hence into two tax returns. Therefore, two years.
2) The biggest catch will be, surprises of surprises, you may not qualify for complete credit. The parameters depend on your tax liability and how much you are really looking forward to pay to the IRS. Which implies the more you pay to the IRS, the higher tax credit you will be able to qualify for.
3) You will definitely qualify for this credit and hence claim it on your 2008 tax return.
4) Even though people are touting it as a loan, you do not have to repay this credit.
8000 Tax Credit First Time Home Buyer sounds like a dream come true for home owners. I am sure even those who are getting 4000 would be happy. Original bill would have given a higher pay off but this is fine as well.
This is a great provision. This article outlines the credit in detal but one question I have as is how is the credit applied for dual occupants where one is eligible for the credit, but the other is not?
You have the politics of this all wrong. A Republican Senator in the grips of the NAR tried to put the provision in. It was reduced to its current form in the conference committee meeting between the house and the Senate.
This article provides updated information on the tasx credit, particularly for joint situations :
- If you and your spouse claim the credit on a joint return, each spouse is treated as having been allowed half of the credit for purposes of repaying the credit.
- If two or more unmarried individuals buy a main home, they can allocate the credit among the individual owners using any reasonable method. The total amount allocated cannot exceed the smaller of $7,500 ($8,000 if you purchased your home in 2009) or 10% of the purchase price. Note: A reasonable method is any method that does not allocate all or a part of the credit to a co-owner who is not eligible to claim that part of the credit (I would go with 50/50 as a reasonable method if one person is not eligible for the credit)
Leave your link in the Header info and not the post.
This 8000 tax credit is great!!We’ve bought our first home in January 2009 knowing that we were going to get the 7500 $ free interest loan which would’ve been a great help for us(this loan helped us a great deal to decide on buying the house).But the 8000 tax credit is just wonderful.We’re just waiting now for the software to get updated so we can file the tax return.I hope this will make other people get into the market and help our struggling economy get better.
Just a quick question. I sold my home (closed) on April 28, 2009. I am in the line again to buy a home and want to take advantage of $8000 credit. It says that I have wait three years from the date of selling my old house to qualify. I am in the process of writing a contract to buy a new tomorrow but won’t do closing on the new home until April 30. Should I wait another month and write a purchase contract after the April 28 or it only counts when the new home was closed? Can any one help me here. thanks.
Sunny!!
I think the time period is between Jan. 1, 2009 and Nov. 30, 2009 instead, which makes more sense because the bill just passed in Feb, so it does not make too much sense to have the deadline at April 09.
Also, if I bought a investment property 3 years ago, do I still qualify as a first time buyer? Thanks so much!
Screw the republicans! You mean the tax credit COULD have been $15k, but to bring along the overly partisan republicans, we will now ONLY get $8k? Oh sure, give another tax credit to Big Oil or King Coal, or anyone making at least $1 million a year, but F*** the little guy. THAT is why I will NEVER vote republican again. It’s sad, all those years I believed them…
I’m buying a house, i got my real estate agent telling me I get the credit 30 days after i close on a house, and i got mortgage lender tellign me not till i file my taxes at the end of this year….
who do i believe? i tried calling IRS but i’m too dumb to navigate their options to get to somebody who can answer my question.
any idea?
the 30 days after i close sounds TOO nice to me.
Why don’t you tell it the way it is. The republicans pushed for $15,000 tax credit and it was the democrats that didn’t want to increase it past $8000. The bipartisan push was by the republicans, who understand they need to get people into the houses so they can pay more taxes and increase the values of the homes they live around. Obama would put everyone into the projects if they had a choice.
this is why our economy will only get worst,before things can actually get better.You have hard working people who would like to live the all, “American dream”,and on the other hand you have those people who are struggling to keep what they work so hard for,and the goverment seems to think that by giving a $8000 dollar credit is going to change things for the better.O.k,it might put a band aide on things,but then the problem is still there……..my advise to the government is, stop worrying about, “the banks”, “car companies”,and” wallstreet”,and focus more on “main street”. we the people are the ones who put into the economy,we the people are the ones who pay taxes, and we the people never have a voice!!!!!!!!!invest in the people and the people will invest on the economy!!!!!problem solved…..so,a $15000 dollar tax credit is a good way to start on the housing problem.
This incentive is not a “band-aid”. It is literally keeping the real estate economy alive. It is creating liquidity in housing for seniors, people who are divorcing and first-time buyers. I’m a real estate broker and we have been processing these transactions weekly. These buyers are the one bright spot in an otherwise lackluster real estate market.
The credit is also having a huge positive impact on reducing unsold housing inventories in areas where the inventory vastly exceeds the ability of the market to absorb it. Buyers are receiving multiple benefits, including the ability to purchase foreclosures at super prices and then to receive the $8000 credit on top of that, which they may use for rehab or as a “cash cushion” as they make payments.
The incentive does invest in people. It provides them with up to 10% of their downpayment. I have clients who literally would not be able to buy without this provision.
I’m sorry to read so much misleading and inaccurate information from “tea party” fanatics and people who simply despise the Stimulus package. I’d strongly encourage prospective buyers who are seriously interested to look into this issue further, and they should not be swayed by political hype from either end of the political spectrum.
Hi…
Am completely new to even thinking about purchasing a home, but heard about a tax credit- heard a few different things- is there a difference between the 7500 no interest loan and the 8000 tax credit, and is it a credit against taxes owed, or is it a rebate? Does it work on a condo? Thanks for the help.
does it work even if you owened a mobile home and then bought a house
Check out this story about the extension of the housing tax credit:
If you want to skip it, here’s the interesting part (which they do not explain in detail):
1,400,000 homebuyers have taken advantage of the tax credit.
The story specifically states that NAR estimates that 350,000 of those wouldn’t have purchased without the tax credit, meaning 1,050,000 would still have purchased without the tax credit.
This means the total cost of the program breaks down like this:
1,400,000 x 8,000 = $11,200,000,000 (11.2 BILLION)
This means the total cost to give the 350,000 people who wouldn’t have purchased a home without the tax credit was the 11.2 Billion; which means:
11,200,000,000 / 350,000 = $32,000 per transaction
So:
It cost $32,000 for each individual who got the $8,000 tax credit, to motivate them to purchase a new home.
Wow.
Carmen Arruda