2009 Economic Stimulus Package and the $15,000 Homebuyers Tax Credit – All the answers to your questions
The American Recovery and Reinvestment Act of 2009 better known as the stimulus bill has a very interesting tax cut that is sure to fire up the real estate market. In the bill as drawn up American’s would receive up to a $15,000 tax credit for buying a home in 2009. I’ve dissected the bill and made it easier to follow than the full amendment.
Congress is looking to get the bill down to $790 Billion and the $15000 tax break may be the first big cut. I’m keeping a close watch.
The $15,000 tax credit for buying a home has been removed from the House version of the bill. The bill contains a budget of $2-3 Billion for maintaining the $7500 tax credit only for first time homebuyers as defined below. The $7500 tax credit will not have to be paid back.
The home buyer tax credit will work like this. All taxpayers who buy a home in 2009 will get up to 10% of the purchase price back in a tax credit up to $15,000 (on a $150,000 home). The bill will not be retroactive and only affect home purchases after the bill is passed.
Currently the bill is set to go through before Friday February 13th. If enacted then, all home purchases after February 13th would qualify for the tax break.
Now there has also been a lot of talk about the $7500 tax break that homebuyers would receive in 2008. This tax credit is much different than the one in the stimulus package due to the way the tax credit is received. In essence the 2008 homebuyer tax break is nothing short of a 15 year interest free loan.
The 2009 stimulus bill’s tax credit does not have to be repaid and is twice as large as the 2008 bill. Those who believe they will qualify for the 2009 break should not file 2008 income taxes until the language is sorted out on the stimulus bill and it is enacted into law. There is a possibility, although small, that some people could get both tax breaks. (The 2008 bill is actually in effect until summer 2009 so some new buyers could get the both credits as well.)
It is also important to note that the 2008 bill only covers first time home buyers while the 2009 stimulus will cover all buyers.
Here are the details on the 2008 first time homebuyer tax break:
Bought a main home in the U.S. after April 8, 2008
Did not own any other main home within 3 years of this purchase
Made less than $95,000 (for individuals) or $170,000 ( for married couples) in 2008
Repaid at $500/year beginning 2 years after you claim the credit on your taxes.
I’ll be updating this frequently with new information as it comes out. As it is right now the 2009 stimulus package has yet to be passed thus all information here could change at any time.
You can bookmark this page now by pressing Control+D (Ctrl D).
Update: Check out the full text of the 2009 tax credit amendment here: http://isakson.senate.gov/Amdt_106.pdf If any new amendments come out they’ll be posted.
Update: The Bill has now passed the senate and will be going to the house where final negotiations will take place between both parties.
A $2500 college tax credit was also included in the final bill.
So we are clear, the 2008 tax credit does or does not have to be repaid?
As of right now, the tax credit is not retroactive. The people who have bought a home in 2008 and closed on it before the bill passes, they will qualify for the 7,500 but will still have to pay it back. Until the details get put out there, which they haven’t all of this is rumor. We hope they will change it for those of us who have bought a home allready but if not, this is still a good deal.
I agree.
According to this from CNN (http://www.cnn.com/2009/POLITICS/02/13/stimulus.winners.losers), it is $8000.
We am not a first-time homebuyer. We are building a new home. It will finish and the construction loan will be converted to a mortgage in 2009. Do we qualify for anything?
your date of purchase would be the date you signed the deed and it was recorded at the register of deeds- not the date you agreed to buy the house, ie- purchase agreement date@Dan
@Clark
uggh i agree with you. that is not fair it should be either we all pay it back or no one does.
Thanks for all the great information here and reading the comments provided a lot of insight as well. I published a similar piece and the type of responses is eye opening.
I am wondering I cant afford to buy a regular home, I am on social security and my income is 673.00 a month, will the first time home buyers that buy any kind of home, qualify for anything. To help them have a home of any kind,a manufactured home or a fifth wheel trailer or a motor home
to live in. I am senior and disabled is there a program for us who worked our whole lives here in the United States of America, we give all our aid for schooling to foreign students with basically no restrictions Program W>A>I>V>E Pays for child care, transportation, education, all expenses and housing. for students that come from foreign countries and then they go back to the countries they love, and use that education that our hard working dollars paid for in taxes when our own kids cant get much of anything if they have parents that make too much money. go figure?????
qualify for a first time home buyers loan or
yay another waist! Too bad Americans have become so weak, they can’t make a stand (or can’t afford to) instead we just watch our money go out the window to big business and banks who have the full support of the government and we the people fight for the crumbs left over. If I were to act like our leaders I would be thrown in jail for life. I guess we get a front row seat to seeing how a trillion dollars (plus) goes to every pos “too big to fail” irresponsible scum instead of “the people” once again (and again, and again, and again, and well you get the point). Amerika is most definitely not worth the price of admission any longer.
I am building a home for the first time. What do I need to do now to get this credit. Can this money go toward a down payment or does it come as part of my tax refund? Thanks.
@Mike Dale
The bill has been canceled.
Hello all, i purchased a home in April of 2009. i was going to hold off in claiming the stimulus for the 09 taxes. i was told that if i do not claim that stimulus before November of 09 i will loose it? is this correct? does anyone have any information on this? thank you.
Hi, my husband and I bought a house in Feb. 2009.. it is his second house.. are we qualified for the repeat homebuyer stimulus? he owned his first house for 2 years before we bought a new one.. thanks..
My husband and I are about to buy a beautiful used 5th Wheel which will end up costing around $40,000. We are getting reading to begin living and traveling in it. Does a 5th Wheel qualify? I read that an RV with an engine qualifies and a travel trailor secure to land qualifies but I can not find specifically for a 5th Wheel that is obviously a house that we will be living in yet traveling like an RV would qualify. Thanks for any information.
The poor folks that got the 2008 New Home Buyer deal got “ed” compared to the 2009 package where they will not have to pay the money back. Is congress going to adjust the requirements on the 2008?