somebody explain this housing tax credit that Congress signed today?

pontius

pontius

Active Member
I saw this story that they signed a bill allowing up to $15,000 tax credit for new or existing houses.
this is the line in the story that I want explained......
"The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break for the purchase of new homes only."
I built a new $200,000 house in 2004 and as far as I know, I've never got any kind of tax credit for it. the interest paid per year is a credit, but according to the above quote, I should get at least a $7500 tax credit, correct?
 
tangman99

tangman99

Active Member
Not sure as I have not heard about it, but the interest you pay is a deduction, not a credit. A credit is face value of what you get returned. You get a deduction on the interest of your tax bracket rate so it's a percentage. If this is a credit, it is something new as far as I know.
Looks interesting though.
 
ruaround

ruaround

Active Member
if it goes through it will be effective on your 09 taxes... its too late to make it effective for 08...
 
sickboy

sickboy

Active Member
Ok, from what I gather, it is 15,000 dollars, or 10% of home value (whichever is smaller), and the home must be purchased between Jan.1 and Aug. 31. I also believe you have to be a first-time homebuyer. So, unfortunately, you will not recieve this tax break. They also did away with the 7,500 "free" money that I was talking about in the other post.
Basically, it is the one thing that the Republicans are putting in this enormous waste of money....aka the stimulus bill...and it is to entice those that do not own a home, to buy one. I believe it is acting like an interest free loan.
But, like I said, I should have the technical info from my relatives tomorrow, and that will come from 2 large accounting firms. I will post it then.
 
bionicarm

bionicarm

Active Member
I found this on one site:
Feb 04, 2009 – It is official as Senate voted to give a tax break of up to $15,000 to homebuyers to help housing market.
The new tax break would give home buyers a tax credit of 10 percent of the price of a primary residence purchased within a year, up to $15,000 to stabilize housing market and prevent foreclosures.
Qualify for purchase quote: http://www.ratetake.com/

[hr]
quote.html
A first time home buyer is defined as any individual who had no ownership interest in a principal residence during the three years prior to the house purchase. Rental property, vacation home or undeveloped land does not qualify you from claiming this credit.
The credit must be repaid in installments over a 15 year period. Repayment would begin two years after the year in which the credit is claimed.
If house is no linger used as primary residence, or sold, the repayment is accelerated. The credit is for taxpayers who’s gross income is between $75,000 and $95,000 ($150,000 to $170,000 for joint fillers)
The credit will be claimed on your 2008 tax return with Form 5405. If you purchase home in 2009, you can opt out to file an amended 2008 return to claim the credit.
So the way I read it, it's the same plan they had with the $7500, but they just bumped it up to $15,000. It also appears that it isn't a 'true credit'. Meaning you still have to pay the money back over a 15 year period. Sounds like they're just giving you money to help you make your down payment for purchase.
 
reefraff

reefraff

Active Member
There was a 7500 credit to first time home buyers that was part of the last stimulus package. The new 15,000.00 credit is for all homebuyers, not just first timers.
 
reefraff

reefraff

Active Member
And before you run out and buy another house (we are) the new 15000K credit is part of the new stimulus packages so make sure it passes before you take the leap.
 
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