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$15,000 Homebuyer Tax Credit

Written by Nickel - 242 Comments

Big news tonight… The Senate just voted to give a tax credit of up to $15,000 to homebuyers check federal income tax. While I haven’t found details of the proposed implementation, I know that Senator Johnny Isakson of Georgia was pushing for a larger credit that would be available to all buyers of a primary residence, not just first-time homebuyers. He also wanted to extend the eligibility period to December 31, 2009 and waive the repayment requirement. I’ll update when I know more.

Update: From Isakson’s press release:

Specifically, Isakson’s amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

So… It sounds like that people who already bought might be out of luck. This reads like they’ll be subject to the rules that were in place when they bought. It’s still possible, of course, that the repayment requirement on the $7500 tax credit will be waived. Of course, none of this means anything until it’s actually signed into law.

Update: The Senate version of the $15,000 homebuyer credit has been removed from the stimulus package.

Update: Looks like it will be an $8,000 tax credit for first-time homebuyers.


Published on February 4th, 2009
Modified on January 12th, 2012 - 242 Comments
Filed under: Economy, Taxes

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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242 Responses to “$15,000 Homebuyer Tax Credit”

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  1. 1
    pdb Says:

    im a first time home buyer but i recieved some funnding from a mrb. will i be able to claim this new 15,000 dollar tax credit.

  2. 2
    The Passive Dad Says:

    Can I refinance my home and still qualify? Sounds like the new car tax incentive to get people buying homes again. Would be wonderful if someone snatched up the two foreclosures on our street soon.

  3. 3
    Doug Says:

    Can I sell my current house to my wife and get the 15k credit? Gotta find the loop holes!

  4. 4
    Keith@DebtHacker Says:

    Ugh.. as if I needed more reasons to regret buying my first house at the peak of the real estate market a few years ago :(

  5. 5
    Dan Says:

    What home purchase dates are eligable?

  6. 6
    John Says:

    I puchased my first home In December of 2008. Will this 15K be retroactive or do I get stuck with a $7,500 credit that I have to pay back?

  7. 7
    jeff Says:

    I need homebuyer help also 15,000 would pay off WAMU at 24% which started at 9% from providian which is now chase because I was (1) 24 hours late with a payment in 4yrs and improve the home termedously but i’ve been in my home 4yrs everyone needs help. So I hope they include some people who need this help also it also would stop some foreclosures and allow refiance at a better rate to straighten this crap up.

  8. 8
    Ryan Says:

    I sure hope this is the case – I’ll file an amendment for $7,500 more and not have to pay any of it back – that stimulates my economy!

    Quote:
    Isakson’s bill would spread the $15,000 credit over three years for the home buyer, and apply only to owner-occupied home purchases made from March 2008 to February 2009.

    https://www.accessnorthga.com/detail.php?n=206354

  9. 9
    John Says:

    I cannot imagine it would only go until the end of this month, that quote has to be wrong. I hope it does go back to march 2008 though

  10. 10
    Ryan Says:

    From Sen. Isakson’s official press release – it sounds encouraging in that I interpret “sunset” to mean “supersede.”

    Quote:
    Specifically, Isakson’s amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid.

    The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.

    In April 2008, the Senate passed legislation to stimulate the nation’s declining housing market that included Isakson’s proposal. However, the final version of the legislation that was signed into law included only a $7,500 tax credit for first-time homebuyers that must be repaid over a 15-year period. Isakson’s amendment that passed today would sunset that $7,500 tax credit.

    http://isakson.senate.gov/pres.....ousing.htm

  11. 11
    Jennifer Says:

    I as well purchased a home in December 2008. “Will this 15K be retroactive or do I get stuck with a $7,500 credit that I have to pay back?”

  12. 12
    pdb Says:

    i was not eligilbe for the 7500 rebate because of a mrb will this new bill allow me to get the tax credit.
    someone post if you know becuase i could use that dough. thx

  13. 13
    nickel Says:

    People, people, people. Let’s not get ahead of ourselves. This amendment could get changed or completely removed before it becomes law. The sorts of details that some of you want aren’t yet available, and may be a complete non-issue by the time all is said and done. Patience.

  14. 14
    Ryan Says:

    I don’t know, it’s got to be a fairly telling sign if the amendment was unanimously passed in the Senate by both parties. Other stuff may be added, deducted, or altered, but I don’t believe any party has any interest in taking away from this amendment.

    The key here however is that regardless as to the fate of this “stimulus” bill, both sides are in favor of a separate if need be housing bill; I believe I read where Geitnher is working on that in case further housing stimulus is needed?

  15. 15
    John Says:

    “The amendment would sunset the current $7,500 housing tax credit on the date of enactment”

    To me this means that this would replace the current $7,500 tax credit, but you would have to buy a house after the enactment of the ammendment to qualify for the full $15,000. So everyone who bought before would only be eligible for the $7,500 credit. I think the senate will eliminate the provision that requires it be paid back over 15 years.

  16. 16
    Mary Says:

    Ryan, I believe the text of the amendment said that the home would have to be purchased in 2009 only, and that the tax credit would have to be taken on the 2009 return, or broken up over 2009 and 2010 returns if the buyer did not have enough tax liability in 2009 to max out the credit, as this credit is non-refundable unlike the refundable $7,500 that this amendment would replace.

    Sounds pretty lame, since the purchase can still only be for a principal residence. Maybe if people could buy up forclosed properties to rent or resell it might have helped, but only the limited few who still have great credit, enough income to need a $15,000 deduction, and who would most likely be upgrading from a home they currently are going to be able to use this supposedly expanded credit. I think the current tax credit is more beneficial to more people.

  17. 17
    Crystal Groves Says:

    I just did my taxes last night for the $7,500. It would be nice if I could get the $15,000 one instead, but not keeping my hopes up about it.

  18. 18
    C L Paro Says:

    I’m am just sick of all this first time homebuyer crap, We bought a house we could afford!!! We make our payments!!! We’re my credit/bailout !! We could use a new roof and siding. I refuse to refiance for those costly repaires, but I’ll sure take a free credit .How about helping the people that pay thier taxes, I mean actual pay some taxes!!!

  19. 19
    texasdem Says:

    No, I do not think this applies if you bought your home in 2008 (I bought mine in October).

    If you look at the text of the amendment (go to thomas.loc.gov — search for Isakson’s legislative record and look at his amendment) — it says:

    “(1) DATE OF PURCHASE.–The credit allowed under subsection (a) shall be allowed only with respect to purchases made–

    “(A) after December 31, 2008, and

    “(B) before January 1, 2010.

  20. 20
    Ish Says:

    I saw that too but also read that it was going to be from March of 2008 to Feb. of 2009. What’s the truth?

    I’m a first time home buyer, june of 2008, I bought a house that I could afford, I make my payments early, and pay my taxes.

    Don’t clump smart people that did their homework and bought houses they could afford at rock bottom prices in with the morons that move into a $400,000 house making 15 bucks an hour. Sounds like you’re pisssed because you over paided for your house 2-3 years ago and it’s falling apart.

  21. 21
    Ryan Says:

    If they are going to amend the dates so as to retroactively apply to January 1, 2009 forward, then why not just amend it for the entire credit?

    It makes absolutely no sense, especially since they readily admit there wasn’t enough people using the credit in the first place. I guess we just must have bought when the market was BOOMIN’!

  22. 22
    Carmelo Says:

    I understand the credit is to be allowed for two taxable years 2009 and 2010. However in section 3(h) on page 8 it does say that “a taxpayer may elect to treat such purchase as made on December 31, 2008″ So, the tax credit can be allowed in 2008, correct?

  23. 23
    nickel Says:

    This will be an unpopular opinion amongst those of you who bought during 2008, but here goes… The goal of this measure is to get people to buy houses. If you’ve already bought a house, then you’re not one of the people that they’re targeting here, so why should they hand over the money? It sucks, but it also makes sense.

  24. 24
    C L Paro Says:

    I didn’t over pay for my home and its not falling apart. It needs repairs there is a difference. I’m just sick and tired always being in the middle. Not quite poor enough and not rich either! Where is all the credits in this crappy stimulus plan for the working poor. Yeah it sucks I bought my house in 2006 so I should have to foot the bill for someone else to get a nice tax break 3 years later? Why not a straight Home owner Credit for home owners who play by the rules!!! Not reward the one’s who profit on some other dumb-ass’s mistake.

  25. 25
    Ryan Says:

    But again, if the bill would “retroactively” amend even to the first of the year, the principle is laid – if you already bought a house in January 2009 then why should you get the credit – you already bought?

    Amend it for all who have used the credit or amend it for nobody – it’s the government picking and choosing again.

  26. 26
    nickel Says:

    Ryan: Read my update, above. The Isakson press release says that it would be effective on the data of passage for one year.. The $7500 credit would likewise sunset with passage of this measure. So there would be no backdating. Or at least that’s how it sounds.

  27. 27
    Heather Says:

    I am closing on a house next Friday. Will I qualify for this if it happens at all or will it only apply to those who purchase after the bill is signed into law? If they sign it next week I may need to push back my closing. I need some clarification. This is cutting it too close for me.

  28. 28
    Patty Says:

    OK, we bought our house in 2008, but we closed before April. Why cant we get the credit? It says After April 8th. Why is that? are there any loopholes for us? we could use the credit,

  29. 29
    Ken Says:

    Great more things to help artificially inflate the still overpriced housing.

  30. 30
    Cindy Says:

    I bought a house last year too after the Act 2008 was signed into law, too bad, I will miss this one.
    For whoever qualifies under the previous act, maybe there is still a slim chance by writing to your Senators see if they can cover the dates on the original bill.
    There is nothing to lose, and we have already gotten $7500 interest free loan.

  31. 31
    thomas Says:

    All this is going to do is drive even more people to get into homes that they a)can’t afford b)shouldn’t buy c)shouldn’t be homeowners d)drive home prices even higher.

    I’m in the bucket for the $7500 first time package currently available and I’m glad that it’s a payback program. Would I like it to be free? Sure, but I know that I can use that money to do good things to my personal investments. I’m not greedy and I don’t have wealth envy.

  32. 32
    melissa Says:

    YArrrr…. We got our house in november…. i was excited for the new stimulus until i read at the bottom of the amendment that it would apply for dec 31 and later- please all of us who apply for the 7500 credit- email Isakson or your rep so that they can amend the whole bill!!!!! 15000 is a lot better!!

  33. 33
    Michael D Says:

    I’m closing on a house next Thursday and all this news about the tax credit being 1) doubled and 2) a true credit rather than a 0% interest loan for the next 15 years – really makes me excited. The house I’m buying is about $60K undervalued (yes, it’s a foreclosure) and this $15K tax credit will really help me do alot of good around the house and with the rest of my finances.

    And Heather (closing next Friday) yes, we will qualify for the $15K credit since they’re making it retro at least back to Jan 1, 2009.

  34. 34
    Shoeby Says:

    “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 but only for first-time homebuyers.”

    http://news.yahoo.com/s/ap/200.....s_stimulus

    So it appears this doesn’t really help me all that much, as the house I’m in negotiations to purchase is one that I can easily afford at $85,000. I could have bought a house for $150,000 and was pre-approved for $165,000. But instead chose to purchase modestly.

    I’ll take my smaller payments at $85,000 with only 8500 back than budget busting payments at $150,000 with 15,000 back.

  35. 35
    Shoeby Says:

    I just re-read that and it indicates 10% of the value of the home, not 10% of the purchase price. The home I’m purchasing is valued at $150,000 even though we’re practically stealing it at $85,000. (Gotta Love those short sales)

    Man I do hope it’s based off the value and not the purchase price.

  36. 36
    texasdem Says:

    Carmelo, I saw that too — ” ‘a taxpayer may elect to treat such purchase as made on December 31, 2008′ So, the tax credit can be allowed in 2008, correct?”

    I had hope at first, but what that means (I think) is that if you buy a house in February 2009, you can claim it happened December 2008 for tax purposes (i.e. so you can get the refund on April 15, 2009 on 2008 taxes rather than waiting until April 15, 2010 on 2009 taxes).

  37. 37
    Adam Says:

    Anyone have any insight about whether this credit would be available for purchasers of land with the intent to build a home within the next 2 years? We’re renting now and thinking of buying a few acres, then saving a little more and building a small house.

  38. 38
    Angela Says:

    If it were not for bad luck I would have no luck at all. My husband lost his job a few years ago, we had to file bankruptcy and had to lose our home, which finally foreclosed in 2006. We rebuilt our credit and was able to get a VA loan in June of 2008. We can’t qualify for the $7500 because we owned a home within the previous 3 years (title changed from our name in Nov. 2006 even though we walked away in August 2005). So we missed out on that. Now we can’t qualify for the $15000 if it only includes homes bought in 2009. Other than all of that we would qualify, our income is not too high and our house was bought for $15000. I agree with previous comments that the new proposal should absorb the old proposal and include the dates of the old proposal. It’s like chasing a carrot around on a stick. I would have been happy with the $7500 at this point.

  39. 39
    Heather Says:

    I am still totally confused. I just can’t figure out if it is retroactive for this year or only for those who purchase after it is signed into law. I am hearing both.

    When will we know if this will be approved by congress. When will they vote. I have heard the president will get the bill late next week.

    I close next Friday!!!!!

  40. 40
    Solon Says:

    This is great news. But it wouldn’t the 4% interest rate on all home purchases stimulate the market moreso than this tax credit? For the most part, people will need to wait until next year to get the money from a purchase they may make this month or next. But allowing purchasers to hold a 4% rate for 30 years, I think, is more of an incentive to buy.

    Anyone heard any news about this alleged 4% across the board interest rate for homebuyers?

  41. 41
    Thomas Says:

    I am supposed to close on a home Monday. I qualify for the $7,500 interest-free loan/credit. Should I wait, and lose the 4.5% rate I’m locked in at or go ahead and lose the $15,000?

    Dang.

  42. 42
    nickel Says:

    Heather et al.: Nothing is set in stone until it’s signed into law. However… If you read the Isakson press release (linked above in Update1), it clearly states it will be effective for one year starting when it is signed into law, and further that the old ($7500) provision will sunset once this one is signed. In other words, it looks to me like the $7500 credit will be in effect until it’s replaced by the $15k version. I haven’t had time to read the actual legislation, but your best bet would be to read that keeping in mind that its subject to change until the it gets sent to the President. As for when that will happen, I have no idea.

  43. 43
    Ryan Says:

    If I never took the $7,500 new home buyer credit than I probably wouldn’t really care one way or the other; their pissing away our future in so many ways what’s a few more billion?

    But for we few who actually used the credit in 2008, trying to help the market and the government out we are now essentially going to have to repay our tax credit (because the market was so much better for us, you know) so all of these new buyers can get double the credit we got and not even have to pay it back – that’s a tad insulting.

    It’s the principle of the point, it’s better than nothing but that’s not my point. Either you get the credit or you don’t, but don’t make it so much different for half than the other half by making one have to pay it back and not the other – if I would have known I gladly would have waited, but then what would that have done for the hosing market?

  44. 44
    Greg Says:

    Before you run out and buy that new dream home, do some research on how much home prices are expect to fall in your area over the next one to two years.

    I live in the Washington, D.C. metro area. Our median home price is about $350,000. Those prices are expected to fall at least 10% more over the next year or two, which means that the median price will be $35,000 less.

    So not buying still beats a $15,000 tax credit.

  45. 45
    Chris Says:

    I just filed for my 7,500 interest free loan two days ago… Where can I go to get the latest updated information regarding this new admendment?

  46. 46
    Paul Says:

    Isakson’s bill would spread the $15,000 credit over three years for the home buyer, and apply only to owner-occupied home purchases made from March 2008 to February 2009. It is one of many proposals introduced recently to address the growing housing crisis. Isakson said his measure is generating interest on Capitol Hill, but it’s unclear whether it will gain traction.

    sounds like this would be retro for most people that purchased a home after the inital 7500 credit was put into place, however this means nothing until actually signed into law…

  47. 47
    Paul-J Says:

    #

    Isakson’s bill would spread the $15,000 credit over three years for the home buyer, and apply only to owner-occupied home purchases made from March 2008 to February 2009. It is one of many proposals introduced recently to address the growing housing crisis. Isakson said his measure is generating interest on Capitol Hill, but it’s unclear whether it will gain traction.

    https://www.accessnorthga.com/detail.php?n=206354

    —–
    You guys are quoting from a website and newsrelease over a year old, referring to different legislation from last year — not what was signed yesterday. So the March 08 – Feb 09 timeframe mentioned there is no longer valid.

  48. 48
    Linda Says:

    I need to know if the income ceiling for couples to qualify will be lifted. Now couple’s have to make less than $170,000 to qualify for the $7500 credit. Where can I read the specific legislation that was voted on?

  49. 49
    Billy Says:

    http://isakson.senate.gov/Amdt_106.pdf

    Nobody who has already purchased a home should get excited about this – it only applies to purchases after the legislation is enacted. Moreover, if you took the old credit you still have to pay it back. “Sunset” does NOT mean “supersede” – all it means is that when the new credit is enacted, the old law for the $7,500 credit is no longer in force as of that day (but still applies for people who purchased prior to that day).

  50. 50
    Solon Says:

    the good news is that it may pass tomorrow. But what of the 4% rate????

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