Details on First-Time Home Buyer Tax Credit
Is the economic stimulus package just another band-aid to stem a wound that requires a tourniquet? Late Wednesday, the House passed President Obama’s $820 billion stimulus plan and next week, it goes before the Senate. According to CNN, part of the stimulus bill is a $7,500 tax credit for first-time homebuyers, which is legislation that is now active, but the bill has been essentially re-worked. Instead of the tax credit being repaid over 15 years as prescribed by the Housing Recovery Act, this new plan means first-time homebuyers get the money outright — no need to repay.
Some of the details (from CNN):
- To be eligible, buyers cannot have owned a home for the past three years.
- The new home has to be used as a primary residence.
- The credit phases out as income rises above $75,000 for singles and $150,000 for couples, and disappears entirely at $95,000 and $170,000, respectively.
- To apply for the credit, just claim it on your return. No other forms or papers have to be filed.
Will this be the cure-all for our housing situation? No one knows. But, with low mortgage rates and this kind of tax incentive, this could potentially jumpstart the jittery homebuying market.
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Posted by Carlos Sagastume on January 31, 2009. Filed under HUD Homes.
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