Its been all over the news. By now, Im sure you heard something about it. The original push, specifically for Real Estate, was for a First Time Homebuyer to receive a tax credit of $15,000. That amount has been reduced to $8,000.
The House and Senate have reviewed the plans and made some minor enhancements to the original proposed plan. Below is a quick snap shot of the current plan and the proposed plan, as it pertains to Real Estate. Does the below mean "Go out and buy a home", not necessarily, but it certainly doesn't hurt.
Our current Stimilus Plan approved by the Bush Administration includes the following:
- Tax Credit up to 10% of your purchase price, not to exceed $7500
- Available for purchases between April 9, 2008 and June 30, 2009
- Can not have owned property within the last 3 years
- Must be your primary residence
- Income restrictions ($75,000 per individual)
- Can be applied towards your 2008 or 2009 taxes
- Must be paid back starting in 2010 @ $500 each installment, not to exceed 15 years
- No Interest or Penalties charged for this $7,500 during the payback period
As I stated, the original proposed package was for a tax credit up to 10%, not to exceed $15,000. As of this morning, that has been revised to $8,000. Based on what I have read, here are the guidelines for the new proposed package as it relates to Real Estate. I have bolded the items that are clearly different from the original:
- Tax Credit up to 10% of the purchase price, not to exceed $8,000
- Available for purchases between January 1, 2009 and December 1, 2009
- Can not have owned property within the last 3 years
- Must be your primary residence
- Income restrictions - Individuals not to exceed $75,000 (or $150,000 per couple)
- No Payback, if you own the home for at least 3 years. If sold before 3 years, you will need to pay this money back (details to follow when final approval is received).
The new package has a bigger potential at stirring up business in Real Estate because this would be no longer considered a 'loan' from the government. The $8,000 would be a credit not to be paid back as long as you keep your home for at least 3 years. Sure, the $15,000 would have been nice but the revised proposal still sparks the interest if First Time Homebuyers.
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Other helpful reads may include:
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