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So if you buy a 150,000 house, you only finance 135,000? And if you have to pay the 15,000 back....wouldnt that make your payment higher, or the same as if you financed the 150,000 house?
In the case that you have to pay it back (which is still not known at this point), it is interest free. And from my understanding, and I am by no means knowledgeable about tax-stuff, it is paid back each year through your tax return. So say you were supposed to get a $600 refund, you would then probably owe $400 instead. This would last for 15 years.
My question from another thread still remains though. How is the money given to you in the first place? Say I buy a house in August - will I be given the money in August by check or something? Or will I have to still make the down payment myself and wait to recoup the 15k from my 2010 tax return to be given the 15k? (or whatever amount I take)
I hope the first scenario is true, as the second one would be inconvinient.
In the case that you have to pay it back (which is still not known at this point), it is interest free. And from my understanding, and I am by no means knowledgeable about tax-stuff, it is paid back each year through your tax return. So say you were supposed to get a $600 refund, you would then probably owe $400 instead. This would last for 15 years.
My question from another thread still remains though. How is the money given to you in the first place? Say I buy a house in August - will I be given the money in August by check or something? Or will I have to still make the down payment myself and wait to recoup the 15k from my 2010 tax return to be given the 15k? (or whatever amount I take)
I hope the first scenario is true, as the second one would be inconvinient.
Assuming the bill passes, qualified taxpayers will NOT have to payback the $15,000 tax credit like they have to do with the $7,500 tax credit now in place.
It is a tax credit - meaning the Federal government will reduce your tax liability by up to $15,000, which can spread out over the next two years if the taxpayer wants. For example, if you have a 2009 tax liability of say $5,000 (for tax year 2009 mind you) and you bought a $150K+ house in 2009, your $5,000 tax liability would be reduced to zero...and (if you elected) you would receive a check in the amount of $10,000 ($15,000 tax credit) - $5,000 (your tax liability) = $10,000) as a refund sometime in late spring or summer of 2010. Or you could elect to carry the balance of the tax credit over to be used on your 2010 taxes [which no one would do because the Fed would not pay interest on the money owed you]. You would not receive your tax credit until after you file your 2009 tax return, sometime in early 2010.
I was originally told wrong by the Senator's office staff.
The tax credit only applies to what the taxpayer owes in taxes. There is a 2 tax year window in which the tax credit can be used. It is NOT A CASH REFUND or REBATE. Thus, if you owe $5K in taxes the tax credit reduces your taxes to zero...and the balance of the tax credit is carried over one more year. There is NO CASH REFUND or REBATE.
I was originally told wrong by the Senator's office staff.
The tax credit only applies to what the taxpayer owes in taxes. There is a 2 tax year window in which the tax credit can be used. It is NOT A CASH REFUND or REBATE. Thus, if you owe $5K in taxes the tax credit reduces your taxes to zero...and the balance of the tax credit is carried over one more year. There is NO CASH REFUND or REBATE.
That's interesting that goes against everything that is published right now. Although I guess it would be easy to just increase your deductions to ensure you get your credit.
The tax credit can only be used for primary residences and unlike the $7,500 tax credit passed last year, the money wouldn’t have to be repaid to the government. There’s also no income restriction on who can claim the credit. The credit is nonrefundable and can be claimed over two years, so buyers whose tax liability is less than $15,000 would have a second year to capture the credit. For example, a buyer who owes $10,000 in taxes would be able to take a $10,000 credit in the first year after their purchase, and a $5,000 credit for the year after that.
So this is different than the original plan. I guess we should just wait and see what the final version looks like. I think this version isn't nearly as valuable as the other one, who owes $15k in taxes besides those that grossly underestimate their tax liability? The majority of Americans probably end up with a tax refund every year. Imagine if you bought a home expecting $15k in free money and find out you get nothing! Wow that would suck.
Or is this saying what ever taxes you pay in, you get to credit those back? I'm a little lost.
So, in other words, for those of us who usually get a yearly refund - this means absolutely nothing. Who in the world ever owes 15k in taxes??
I was flipping out when I thought it would be a 15k refund for buying a house. Talk about stimulating. However, now, I am deflated again.
Well people who have a business or do consulting can owe 15K and upwards to the Federal Government.
It seems to cater to specific groups of people. People who make more money. But then if you make that kind of money they probably get houses that are over 300K. And I don't think 15K tax credit is worth it on a home that's over 300K and I know in this area, a lot of those homes in that price range are still way over priced.
It also seems to help the banks. The government gives us a credit but we still will have the mortgage for the purchase price.
So if I bought a house for 300K. My mortgage would still be for that amount for the life of the loan.
This potentially can be good if you are in a certain market and certain price range with a certain income.
We pay a lot in taxes so that's one reason. Then I would buy a house in the 150 price range to max out the credit. There are pretty nice houses in that price range in Charlotte. And in that price range, those homes have declined so much that I don't think they would fall *that* much more. (However homes that are around 300 and up in certain subdivisions I feel have a ways to go since they had a huge runup during the bubble).
Anyway those are my two cents.
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