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The way it was explained in our newspaper this morning, is that the $7500 interest free loan is in effect until the signing of the bill - at that point the $15,000 credit takes its place.
Thanks, Bebette, and that 7500 loan is only for first time buyers, as opposed to the 15,000 being for any homebuyer I guess...well if they are going to sign it I wish they would hop to it then..
Thanks, Bebette, and that 7500 loan is only for first time buyers, as opposed to the 15,000 being for any homebuyer I guess...well if they are going to sign it I wish they would hop to it then..
Senate passed it. So expected to be signed into law by president at end of week or early next week.
You most likely will qualify, as long as you move into the new house within a reasonable period of time after purchasing it. The tax experts - CPAs & tax preparers - are the ones who will be on top of this, so I would recommend checking with a local tax person just to be really sure.
How long is the $15K in free money available for buyers? (I pay over $15K per year in federal taxes, so I qualify for full amount)
Is it for all of 2009 after the bill is passed, say Feb 20th, 2009 or is it good for a certain period of time, say 12 months or longer?
I want to wait as long as possible to buy as I am looking to buy (prices are continuing to drop in 2009 and haven't bottomed yet), want to qualify for the credit, but want to minimize overpaying.
The only negative is that it forces me to look at places priced $150-200K, as the $15K may not make sense for purchases much above $250K with even a 10% decline in prices over the next year.
How long is the $15K in free money available for buyers? (I pay over $15K per year in federal taxes, so I qualify for full amount)
Well, first, it's not "free money." It's YOUR money, that the federal government isn't going to make a graqb for. That being said...
The Senate bill as it was written (but is subject to change as the Senate & House negotiate) allows this tax credit on all primary residence purchases made from the enactment of the bill until one year later.
Quote:
Originally Posted by Humboldt1
Is it for all of 2009 after the bill is passed, say Feb 20th, 2009 or is it good for a certain period of time, say 12 months or longer?
Exactly one year. See above.
Quote:
Originally Posted by Humboldt1
The only negative is that it forces me to look at places priced $150-200K, as the $15K may not make sense for purchases much above $250K with even a 10% decline in prices over the next year.
You can split the credit over a two year period. Maybe this changes the math for you.
Ok so if you closed on your home as a first time buyer in 06/08 you can't take the $15,000 but you can still take the $7,500 when you file your taxes this year for 08..is that correct???
Ok so if you closed on your home as a first time buyer in 06/08 you can't take the $15,000 but you can still take the $7,500 when you file your taxes this year for 08..is that correct???
Tha's correct.
There are a few other differences as well.
If your total tax liability for the year '08 was less than the $7,500, you will get a check for the difference. In the new proposed credit, your tax liability gets reduced, but you cannot get back free cash. If your total tax liability over the two years is less than $15,000, then your benefit is that amount of tax you would have owed.
With the $7,500 credit, you have to repay that money over the next 15 years. No interest, but a flat $500 per year. It gets added to your tax liability.
So, given all the price declines that we are still experiencing, maybe it makes sense for me to wait until Jan-Feb 2010 to buy a place. Why would I buy now with prices continuing to drop if I can buy in 10-12 months and still qualify for this "free" money.
I am not sure how splitting this thing over 2 years affects me as I pay more than $15K in federal taxes (around $30K) per year.
So, given all the price declines that we are still experiencing, maybe it makes sense for me to wait until Jan-Feb 2010 to buy a place. Why would I buy now with prices continuing to drop if I can buy in 10-12 months and still qualify for this "free" money.
I am not sure how splitting this thing over 2 years affects me as I pay more than $15K in federal taxes (around $30K) per year.
If you believe that prices will continue to drop in the specific are you are looking, then yes, it might make sense for you to wait. Or to bid agressively if you happen to see a property you love. Be aware, of course, that other factors, like interest rates, might change as well, and not all in the buyers favor. I'm not trying to convince you to buy in a hurry, by the way. Just suggesting that you contemplate ALL the factors.
As to splitting it over two years, that's for you & your CPA to figure out, eh? I think it was done so that people with slightly lower income, or more deductions, than yours might take the full benefit of the credit.
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