Proposed $15000 tax credit by Congress for new homebuyers (RE market, clause, sales)

[lukeb321]

Still want to know if this will be a "credit" or really a loan that needs to be paid back like the current $7500 plan. The current articles don't say.

[cohdane]

Found the facts! This is from the press release from Isakson's office. He's the senator that sponsored the proposal:

"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."

Johnny Isakson, United States Senator from Georgia


Still has to get enacted, though. It won't be real till they say "go."

[70Ford]

Originally Posted by aneftp

Your plan won't work. The problem is with consumer confidence. There are tons of buyers "sitting on the fence" but afraid to buy because they fear if they buy now and a bottom hasn't been reach, they will lose more value in their homes. Fear and lack of consumer confidence will not bring this economy out of its recession.

Putting 15K in everyone's pocket will not do squat to the economy. It's like the $600 economic stimulus package most regular folks got last year. I believe only 15% of people actually spent money and the rest used it to save or pay off debt.

I'm not advocating going to and buying a home you cannot afford. This potential new piece of legislation will entice more people who are just waiting to finally jump in and buy that home (if they can afford it).

This is bad for a couple of reasons.
My kids will have to pay it back....through their taxes. So will I, I really don't want to pay for someoe else's home purchase. Or pay China to finance it. Do you support China? Do you like taking their money to buy a home? Where do you think the money we borrow comes from?

It is a "gift" that assumes people are inherently stupid.

Let's say I sell lollipops. In 1970 I sold them for $.50 cents apiece. in 2000, I sold them for $2.00. In between 2000 and 2006, Mr. Buddy down the street dies and his fat kid, Johnny inherited 8 bazillion dollars....and he loved lollipops. I saw a way to make some cash here....eh?

In 2006, I was selling my lolliops for $5.00. Kids were balking at the price but I had multitudes of people saying "It's the right time to buy a lollipop!" "Get them before they are gone!" "BUY! BUY!BUY!" It wsa awesome...some of these people had never sold a lollipop in their life. I gave them an 8 hour course and they put a "Licensed to sell lollipops" shingle on their door. Everyone involved in the process was making money, hand over fist.

Then, tragedy. Johnny ran out of cash (and it was suggested he go on a diet). The other kids did, too. Now, they can't afford my $5.00 lollipops. I drop the price 20 percent, but that just made it $4.00 a pop. Interest was nil. Only the kids that absolutely needded a lollipop bought one at that price.

SO, I got wise. I printed up some "15 cents off" coupons and put them where everyone could see them. "OMG!!!WOWZERS!!! Lollipops are 15 cents off now!!!", the kids cried.

What do you think the kids will do? Do you think they see that the lollipop might be worth a little more than $2.00.... or do you think they will think $4.00 is a great deal...if you have 15 cents off?

What do you think?

[HDL]

I would think for those buyers sitting on the sidelines and pricing down 50-60% in some areas, this could be "icing on the cake" !

<psssss...aneftp...if I give you 5 reps, would you PLEASE ask your brother to adopt me ???!>

Originally Posted by aneftp

I believe this will be a real tax credit. They may have you spread the credit over 2 years but blunt the costs to the government.

I read the article too just now. They say its "only going to cost" 19 billion. Compare this to the already 350 billion they just spent to try to bail out the big banks (this hasn't done anything to help the banks), 19 billion is chump change.

At least this will motivate people on the fence to encourage them to buy homes.

My brother sold his home in McLean Virginia near or at peak at the beginning of 2006 and is sitting on nearly 1 million dollars cash ready to jump back into a home in Southern California. There are lots of potential buyers like him out there who have been sitting on the sidelines the past couple of years. Up to 15K tax credit is huge. I just hope they don't set any income limits to this tax credit.

[20yrsinBranson]

Originally Posted by aneftp

I'm beginning to believe the proposed 15K tax credit is beginning to pick up more steam in Congress. Even the Democrats are starting to join the Republicans in this proposal.

Does anyone know of anymore details. I doubt they will give someone buying a 150000 home the full 15K tax credit and it will be phased in the more money you spend.

Are there income limits being proposed also? The proposal would have no effect if they impose income limits on who would qualify.

If it works like the current $7500 "tax credit", you need to know that nobody is giving you that money. It is considered an "interest free loan" and must be paid back.

20yrsinBranson

[trishguard]

Originally Posted by CouponJack

Its really nuts.....seriously.


Look, I understand foreclosures are a problem, and if you want to help these people, here's my solution.

Anyone who is in danger of foreclosing, change their ARM to a fixed so they will have managable payouts, HOWEVER there is no free lunch. If these homeowners sell their home in the future, part of the gains should go back to the taxpayer for getting them out of their mess (ie poor financial behavior).

That's IT. For everyone else who has their home on the market, take it off. Just don't sell. I don't want to hear about people crying about being upside down, yada, yada, yada.....you bought a home you couldn't afford and you should live w/your mistakes. Stay put and pay your mortgage.

Now big brother has to come in to "fix" the situation funded by people who played by the rules.......real nice.

Some of them can afford it, they just over paid and don't want to have to deal with that reality. Apparently neither does the government.

[le roi]

Originally Posted by HDL

I would think for those buyers sitting on the sidelines and pricing down 50-60% in some areas, this could be "icing on the cake"

I don't know where you're talking about that needs a 50-60% correction, but if this $15,000 tax credit was "icing on the cake", then what would houses in that area have to cost, $25,000-$30,000?

I know for me, I'll have to think about this one. It might be the incentive that would push me off the fence, it might not be. It does depend on whether I can combine this $15k with other federally-originated money. Right now you don't qualify for the $7.5k if you use any other federally-aided mortgage programs.

[kerrykwk]

What if I purchase a boat that qualifies as a second home, will the tax credit apply to that?

[adlnc07]

It'll never happen because it'd actually benefit me..

[aneftp]

Originally Posted by kerrykwk

What if I purchase a boat that qualifies as a second home, will the tax credit apply to that?

This won't work. This tax credit only applies to residential primary homes.

Now, if the boat house were your primary residence, than it may or maynot qualify. I do have a couple of friends who do live on a boat and it is their primary home. These are like 500K boat homes so they are basically paying real mortgage payments.

I don't know why people say we have another 40-50% drop to go in home prices. Home prices in most places have already dropped 20-25% from peak 2005/2006 prices. Some of the "far off suburbs" have dropped 30-40% already from peak.

Do people really think they can get 1998 prices? I highly doubt it. We are essentially are 2003/2004 prices already in most areas.

And in the closed in places near the center of most major cities, the values haven't dropped that much.

As others have stated, it's all about local real estate markets. I know in the Washington DC/Baltimore area, most places with very good school districts have stabilized (we're talking about McLean, VA, Chevy Chase MD, Potomac, MD etc) Those "far off suburbs" have taken the major hits (not that the enclosed suburbs haven't, but the far off suburbs had a greater percentage wise run up on prices.

Same thing down in the Orlando area where I relocated. In Seminole County, where there are some affluent neighborhood, homes priced in the 400-500K range are still selling quite well.

It's those homes those investor hotspots (like Clermont, FL) that have taken the major hits.