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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John Cannata Reliant Mortgage p# 214.545.5604
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Thanks for the update. I think it should extend back to 2008.
Good, keep us posted.
See ya tonight.
John, do we know for sure yet if this only applies to first timers?
I agree Nate, but that probably will not happen.
Hi Angelia. Will do.
Brian & Marie - The $7500 tax credit was for First Time Homebuyers. The Obama Administration proposed doing the NEW plan for all homebuyers, but the House and Senate has revised this back to First Time Homebuyers. So, yes as of right now, the plan is for only first time homebuyers (have not owned for at least 3 years).
John this has all been like 1 big courtroom drama. I'll wait for the verdict then start trying to make sense of it all.
sheesh..
And the beat goes on huh?
Every day the story changes. I just want to see the effects.
They need to get a plan and stick to it. Changing it makes it confusing for everyone. Thanks for the update.
John, It does not appear that the National Association of Realtors Lobbyists were very effective in the crafting of this bill...
Greg - I agree. Nothing is easy. We will see what happens.
JL - You said it.
Laura - I have faith that things will improve. Will it be because of the Stimulus package, who knows. I just know it cant get too much worse before it starts to get better. I'll take anything that heads us in the right direction.
Shirley - I agree. Hopefully we will have a final verdict soon.
Paul - Everyone has tried to give their input. Were they effective? Who knows. Cant hurt to show how many of us are on the same page though.
It is enought to drive us all crazy but at least we have each other to check with and see what the newest piece of information might be. This was helpful.
Karen - I am happy you came across my post and found it useful. Nothing has changed from the above so this should be final.
Hi John ! - I am one of the few who actually believes that this $8K credit could make a big difference to get people buying - the key as far as I see it is the PROMOTION of this benefit ! If it gets explained clearly enough for Main Street, then I think it has a great chance. But if the months just fly by, and there's not much media promotion, then it will probably just quietly slide by.
Let's stay positive !!
... oh BTW, like the newest picture !! :o)
Cheers !
Sheldon
Thanks Sheldon. I received a little bit of slack from Jason Crouch and Loreena Yeo about it being black and white (too serious). So, not its back to my old picture (about a year old).
I agree that the package needs to be explained to get people excited about it. There have been too many changes lately that if WE can't get it right, than the average homeowner will not get it right either.
John, Another great post. Thanks for laying it all out so people can try to wrap their brain around all the information!
Thanks Benita. Glad you found it useful and took the time to comment. I know that AR has many posts about the package, so I appreciate you commenting here.