The $15,000 home buyer tax credit that was scaled back in favor of an $8,000 First Time Home Buyer Tax Credit [1] in the economic stimulus plan [2] is showing signs of life again!
Last week, Republicans proposed the Responsible Homeowners Act, which revives the $15,000 home buyer tax credit.
$15000 Home Buyer Tax Credit
The proposal includes a $15,000 home buyer tax credit. Details of the tax credit include:
- Purchases of all primary residences, not just first time home buyers.
- Purchased before July 1, 2010.
- 5% minimum down payment.
Tax Credit to Refinance
In addition to buyers, they propose a refinancing tax credit. It’s a $5,000 tax credit that could be used to cover closing costs, buy down points, or reduce principal. It would include refinances that take place by July 1, 2010.
Since many people are refinancing right now [3] it will be interesting to see if they make it retroactive to include those of you who have already done it. Otherwise it might be another scenario where early birds are left out in the cold.
Tax Breaks for Investors
I was intrigued by the inclusion of tax breaks for investors, since we’re getting into real estate investing [4] right now:
An equalizing of the treatment of a home purchased for occupancy with a home purchased for rental purposes (defined as being rented to the same tenant for at least 181 days out of the year). The same exclusion from taxes for any future appreciation in the home value applies. This covers purchases made before July 1, 2010.
The proposal also includes some incentives for lenders. Complete details on the proposal can be read at TownHall.com [5].
Home Owner Tax Credits
We’ve seen so many forms of the home buyer tax credit. Right now we have the $7,500 First Time Home Buyer Tax Credit [6] (which was really a loan) for 2008 and the $8,000 tax credit [1] for 2009.
In addition, there’s the Making Home Affordable Program [7] for refinances and modifications.
Is anyone else having a hard time keeping up with the constantly changing programs for home buyers and home owners? It seems like it will be really hard to measure the success of any of the programs since they keep changing and adding to them.