$15,000 Home Buyer Tax Credit Possible!

Posted by Madison on February 5, 2009

Update: The $15,000 home buyer tax credit was eliminated in the compromised bill. It’s now an $8,000 First Time Home Buyer Tax Credit.

A reader, Keith, left the following comment about the $7500 First Time Home Buyer Tax Credit:

I just read that the $7500 home buyer tax credit is going to be jumping up to $15000. I wish I was buying a house this year!!!

Good catch Keith! The Senate voted yesterday to expand the $900 billion economic stimulus package to include the $15,000 home buyer tax credit. Here are some of the key points of the tax credit.

$15,000 Home Buyer Tax Credit

  • The tax credit is for 10% of the purchase price of a primary residence up to $15,000.
  • It will be for homes bought within one year of the date of the enactment.
  • The tax credit would be available to all home buyers, unlike the $7500 home buyer tax credit, which is only available to first time home buyers.
  • It would not have to be repaid as long as a buyer lives in the house for at least two years.
  • The idea came from a similar successful tax credit in the 1970s.

We’ll have to stay tuned to see what happens next! If you are in the market to buy a house, this could be a terrific help!



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Comments to $15,000 Home Buyer Tax Credit Possible!

  1. Hmm, in Silicon Valley (where I am) that’s really not worth a whole lot. I bet in Iowa or Texas that’s a big savings.

    Lazy Man and Money

  2. I’m w/ Lazy Man, in Silicon Valley that’s not enough to do much… still, it makes buying a house within the next year (if all that legislation goes through) quite tempting.

    her every cent counts

  3. We bought a house in January, does this mean we would not be eligible for the $15,000 credit?

    Laura

  4. Do you have any info on whether it can be carried over and if so for how many years? I don’t have a $15000 tax liability. It would take me at least 3-5 years to have that much (probably more).

    And yeah, out here in the Midwest–I’m in WI too–$15000 could easily be 15% of the purchase price (at least the house we’re looking at). We’d consider going over $150,000 with a credit like that. This would definitely make us consider moving (except that would leave us with a house to sell, too).

    AnnMarie

  5. Before anyone gets too excited about $15,000, you should notice that it is limited to your tax liability for the year. If you compute your tax as $5000 on your 1040, that’s all you would get. The bill does allow you to take this over two years. I ran through an example on my blog, http://www.stupidcents.com.

    FundPicker

  6. @ Laura: The beginning date will be determined when the legislation is enacted. However, sometimes they’ve gone back and made it retro active, so we’ll have to wait and see if you are eligible once they announce the date.

    @ AnnMarie: It looks like the $15,000 could be carried over into a second year, but it’s limited to your tax liability.

    Check out the FundPicker’s reply. His example is great! Home buyer example.

    Madison

  7. This tax credit makes it tempting to start looking into the real estate market again… At least in my area.

    Marc and Angel Hack Life

  8. Thanks, that’s disappointing. Won’t be terribly relevant for lower and middle class earners who don’t pay $7500 in taxes a year. (At least, I’ve never paid that much so far.)

    AnnMarie

  9. FOR THOSE WHO BOUGHT IN JANUARY:
    THE HOUSE PASSED THE BILL FOR A $7500 TAX CREDIT THAT DOESN’T NEED TO BE REPAID AND IS AFFECTIVE FOR PURCHASES OF HOMES AFTER 01/01/09.
    THE SENATE CHANGED IT TO A $15,000 TAX CREDIT BUT IT IS ONLY AFFECTIVE FOR PEOPLE WHO PURCHASES AFTER IT’S SIGNED.
    IF THE SENATE PASSES THERE’S TODAY, THEN THERE WILL BE A MEETING BETWEEN MEMBERS OF THE SENATE AND MEMBERS OF THE HOUSE TO WORK OUT THE DIFFERENCES BETWEEN THE 2 BILLS.
    I BOUGHT IN JANUARY SO I OBVIOUSLY WANT THE $15,000 TAX CREDIT THE SENATE PROPOSED BUT WITH THE START DATE THE HOUSE PROPOSED.
    YOU NEED TO MAKE YOUR VOICE HEARD AND CONTACT YOUR SENATORS AND HOUSE REPRESENTATIVE. THIS IS AMERICA SO YOUR VOICE IS YOUR POWER. E-MAIL THEM OR CALL THEM. HERE IS A CONVENIENT NUMBER. CALL AND ENTER YOU ZIP CODE AND IT WILL GET YOU IN CONTACT WITH ALL OF YOUR CONGRESSMEN. DECISIONS ARE BEING MADE, DO IT NOW. 1-866-924-NAHB (6242)

    Chris

  10. 8 months later the home owner credit has doubled and no repayment required. Just shows the housing market is getting worse than better. Soon the government will be buying entire houses for folks.

    Andy

  11. Will people whose only income is Social Security, benefit at all from the homebuyers $15,000 tax credit?

    Zee

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