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.
Zero down? Why would a seller want to walk away from closing with nothing? Well, they wouldn’t, and that brings up the most …..
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.
Posted by Carlos Sagastume on January 31, 2009. Filed under First Time Home Buyer Tax Credit.
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