Proposed: $15,000 Tax Credit for Homebuyers
By: Diane Tuman, Zillow Content Manager | February 4, 2009
The federal government is clearly eager to get people off the sidelines and into a homebuying mood after the Senate gave a “voice vote” to a proposed $15,000 tax break for homebuyers Wednesday night, as part of the stimulus package making its way through Congress. Georgia Senator Johnny Isakson (R) was the main sponsor of the bill, who, coincidentally, is a former real estate broker. He said he shaped the bill after another similar economic downturn in the country in 1975, in which homebuyers were given a $2,000 incentive. According to the NY Times, Isakson said:
“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now,” Mr. Isakson said at a news conference. “Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”
I’m sure many real estate professionals can identify with his last statement. RE pros are broken, bruised and battered, hoping that some miracle will come along to get this country’s housing stock back to a healthy state.
For now, we have the Senate’s version of the stimulus package, but this proposal is far from being locked and signed into law. It still needs a vote from both houses and then President Obama’s signature. And, this part of the stimulus package could also be overturned or revised. In other words, in ain’t over yet.
On the heels of the announcement, Zillow Advice is busting with questions and answers:
Q. About the approved $15,000 tax credit - Does anyone know if this would need to be repaid?
Q. $15,000 tax break vs. $7,500?
What is known of the tax credit being proposed…
… is it would give buyers 10 percent of the price of a primary residence — new or existing — bought within one year (of the signing of the bill), up to $15,000.
Current law provides for a $7,500 tax break for the purchase of new homes by first-time buyers and it is a loan, which means it has to be paid back to the goverment with no interest over 15 years.
We’re not sure if this latest tax credit proposal requires repayment or if it’s for first-time homebuyers, only. Lots of questions, but we’ll keep digging out the information. Stay tuned…
More recent blog posts about the $ 15000 homebuyer tax credit:
$ 15000 tax credit - 3 most frequently asked questions
What Does The $15,000 Tax Credit Mean To You?
$ 15000 Tax Credit on Everyone’s Minds
More Details on $15,000 Tax Credit — It Does Not Have to be Repaid
- Stumble it!
- Categories: 8000 tax credit
Comments
22 Comments so far
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Marc on February 5, 2009 12:02 am
now about this 15000 tax break… im a first time home buyer in the market right now living in richmond va…. i was curious does this apply to someone like me who is getting a FHA-PLUS loan? from what i was told the 7500 tax break didnt apply to me because of the FHA loan….Let me know.
10 Ways to Tell We’re At The Bottom Of Housing « ALL ABOUT…..Portland.Oregon.Real Estate on February 5, 2009 1:02 am
[...] fingers doesn’t help anyone; however, getting out of this crisis will help everyone. Here’s a link to a story comparing the 1974 real estate market with today’s when a simi…. The article says that within 1 year, 2/3 of the backlog of inventory was sold and a stable real [...]
Jennifer on February 5, 2009 1:55 am
I’m sorry, but how is having home prices at ridiculous levels “a healthy state”?
What we are seeing today, is home prices returning to a healthy state as they decline in price, but the clueless politicians keep meddling in a vain attempt to keep home prices inflated. These are the same genius politicians who scold lenders for creating the “Mortgage Meltdown” with lax lending standards, yet it is these very lax lending standards which kept prices at unsustainable levels.
Lax lending is gone. Home prices have much farther to fall before the housing market returns to a “healthy state.”
Arn Cenedella on February 5, 2009 7:22 am
Good information.
Until the House passes the bill, the details may change.
I am most interested to find out whether credit will be retro-active as indicated in some proposals.
Catmomma on February 5, 2009 7:45 am
15,000K, proposed, is this within a year, before or after the bill is signed.
Caren on February 5, 2009 9:06 am
I’m interested. I sold my house (at a loss) in August of 08, in order to move in with my Fiance in his leased home because it was in the area we wanted to live in. We’ve been on the fence about buying when the lease is up because we aren’t sure if the market has reached bottom yet. I think a $15,000 tax credit would push me off the fence, though, as long as it’s a true tax credit, and not a loan, and as long as it’s not only for first time home buyers, which neither of us are.
Jason on February 5, 2009 10:04 am
At $15,000 credit would get me off the fence as well. We are in a deflationary environment where people are waiting to buy because they expect prices to keep coming down. This will help some of us to step up to the plate and go ahead with the purchase. I’m still crossing my fingers in the 4% interest rates too. http://www.blurtdail.com
W.B. on February 5, 2009 11:01 am
I am a Builder Salesman. This would greatly stimulate the complete housing industry both essisting & new. They should also give a additional tax break for selling your house to further the ‘food chain” of housing. I sure hope it goes through as we are in need of help in Wisconsin!!
W.B. on February 5, 2009 11:02 am
I am a Builder Salesman. This would greatly stimulate the complete housing industry both existing & new. They should also give a additional tax break for selling your house to further the ‘food chain” of housing. I sure hope it goes through as we are in need of help in Wisconsin!!
kiminc1234 on February 5, 2009 2:54 pm
What about help for people who just want to refinance at a lower rate. We need help too.
W.B. on February 5, 2009 3:13 pm
To kiminc. Right now refi’s are at about 4.80% to 5% must have a 650 credit score or better for the low rates. The Gov is also deciding on a Gov refi for everyone @ 4% with 650 score or better. Lets also hope that happens!!
15000 Tax Credit on February 5, 2009 3:46 pm
[...] Proposed: $15000 Tax Credit for Homebuyers | Zillow® Blog (zillowblog.com) - February 05, 2009now about this 15000 tax break… im a first time home buyer in the market right now living in richmond va…. i was curious does this apply to someone like me who is getting a FHA-PLUS loan? from what i… more 15000 Tax Credit blog posts … [...]
Jeff on February 6, 2009 4:13 pm
Another waste of taxpayer dollars, to prop up an industry that is at the center of our current situation.
W.B. on February 6, 2009 5:19 pm
Sorry my friend it was the lenders not the buyers & sellers.
The Government deregulated the lenders to allow much more liberal lending i.e. to anyone who had a pulse… not any more Ya Gots ta have Good credit like it used too be.
Dee on February 6, 2009 10:50 pm
I am a firstime home buyer. Just recently purchased my home on November 26 2008. If I would have waited another 35 days to close I could have been eligible for the $15000 tax credit that is pending in the Senate. I feel that they should make this whole bill retro to the April 2008 deal. I don’t understand why they can’t do it this way. I am heated. I am thankful for the $7500, but not having to even repay the $7500 back, I would be thankful for. Does anyone understand where I am coming from? How can my voice and others in my same situation be heard??? This is so not fair!!!
W.B. on February 7, 2009 6:01 am
Dee I totally understand your frustrations. This bill hasn’t passed yet & may get booted. But now the industry waits for our government to decide. We live in a society that is Truly run by People in office looking out for themselves only. It should be retro active for ALL of 2008 purchases from the April 08 offer. Go to the local news channel, radio, news paper. Our voice is NEVER heard anymore!!! ^**^%$#@
$ 15000 tax credit - 3 most frequently asked questions | Zillow® Blog on February 7, 2009 2:50 pm
[...] Proposed: $15,000 Tax Credit for Homebuyers [...]
Beth on February 9, 2009 5:38 pm
Dee I feel you. I purchased my first home in Oct 2008. The $7,500 loan was kind of lame, but the proposed $15,000 would be very worth while! Believe me when I stress how scary it was being a first time buyer in this economy. Sadly, according to local real estate agents, my house has dropped about 40k in value since I purchased it in October. So for that reason, I have not put much money into it yet. I think it would be very unfair if they do not include the buyers that qualified for the Federal Housing Tax Credit of 2008. I’m sure that new homeowners would pump that $15,000 right back into our dreadful economy. That is the hole point….right?
Kelly on February 10, 2009 8:26 am
The bottom line is that this home credit will not help home prices, period. Like this example explains, it simply adds a number of new sellers.
http://www.stupidcents.com/324/opinion-realtors-the-biggest-benefactor-of-15000-homebuyer-tax-credit/
jen on February 10, 2009 3:07 pm
I am in escrow if i close escrow before the 15,000 homebuyer tax credit gets signed into law will i still be eligible?
Chris on February 10, 2009 3:42 pm
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 is 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 two 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 hear and contact your Senators and House Representative. This is America, so you voice is your popwer. E-mail them or call them. Here is a convenient number. CAll and enter your 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)
Help Yourself on August 24, 2009 3:25 am
Maybe we need to review the tax benefits and aides to try and help the people that really need them.