Home Buyer Tax Credit
[via Five Cent Nickel ]
The debate about the stimulus plan is in full swing. The plan in its current version includes about $275 billion in tax cuts. What does this mean for you? It could mean a number of things - I’ve embedded the current proposal below for you to take a look.
Five Cent Nickel pointed out one particularly interesting section: turning the first-time home buyer tax credit into a true credit, versus it’s current form of a loan. Here is the text:
Refundable first-time home buyer credit. Last year, Congress provided taxpayers with a refundable tax credit that was equivalent to an interest-free loan equal to 10 percent of the purchase of a home (up to $7,500) by first-time home buyers. The provision applies to homes purchased on or after April 9, 2008 and before July 1, 2009. Taxpayers receiving this tax credit are currently required to repay any amount received under this provision back to the government over 15 years in equal installments, or, if earlier, when the home is sold. The credit phases out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return). The bill would eliminate the repayment obligation for taxpayers that purchase homes after January 1, 2009. The provision would retain the credit recapture if the house is sold within three years of purchase.
If this passes in the current form, the government will be handing out $7,500 towards the down payment of any first time home buyer. While there currently isn’t a field in these rent vs. buy calculators for “free money,” it does alter the equation substantially. Although I’m not in favor of distorting the housing market even more - which we already do so through a number of tax breaks for homeowners - this seems like it could be a deal too good to pass up.
Proposed Tax Cuts - Free Legal Forms
