A $15,000 tax credit is part of the new stimulus package to help first time home buyers afford a new home. That’s not a mis-print there, it is really a proposal that would allow a fifteen thousand dollar tax break to people who purchase a house, with the thought being that this would help the housing market a lot in the short term. Recently the Senate and President Obama had been talking about a $7500 tax credit, but now a new proposal has the amount being raised to $15,000, and it could really help out first time home buyers trying to find an affordable home.
The proposal was brought forward to the U.S. Senate by Georgia Republican Senator Johnny Isakson, who found it necessary to give a bigger tax credit in order to increase the number of houses being sold in the market. This was another addition to the economic stimulus bill that is working its way to completion, and something that housing industry leaders are going to be very happy about. $15,000 is not a little number, and could serve as not only an incentive, but an extremely helpful asset for those looking to purchase a house in this tough economy. The real hope is that it will convince people who have been waiting to finally make the move to buy a home.
The fine print of this newest tax break is that it will apply to anyone who purchases a new home between 1/1/2009 and 12/31/2009, or basically at any point during the 2009 calendar year. Additionally, it states that the economic stimulus tax credit would go into effect as a credit on the following year’s tax return. That means that for someone buying a house in 2009, they would receive the credit on their 2010 tax returns. The final caveat to the tax break, is that it applies up to 10% of the value of the home, with the maximum amount being $15,000 total. That means that a $150,000 house would get the full credit, with houses costing less getting a sliding scale of the tax credit.
At face value, this is a really good plan by the U.S. Senate, and could really promote the purchase of houses, much like it is intended to do. It is going to convince those people who have been waiting for the market to settle that now is the time to make a home purchase, and that the risk will be even less with a tax credit of up to $15,000 waiting in the new tax season. Some may view this as too much money to give back, but the concession within the bill is that it wouldn’t just apply to new home buyers, but to anyone that purchases a new home in the market and remains living there for at least the next 2 years. There is still some work to be done on the stimulus plan, but this could be great news for new home buyers.
Source: Tax Credit Vote Revealed