New Housing Tax Credit

[Martha]

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House could vote on the bill as early as Thursday.
Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

The Associated Press: Congress giving homebuyers a $6,500 tax break

[calmloki]

We're looking at this - a stated wrinkle is that the new house must become your new primary residence - wonder if your old house can stay on as a secondary house...

Also wonder about those unmarried couples who own their home "not as tenants in common, but with right of survivorship". If the title for the old home was vested in Bob and Sue, NTCWRS and interest was paid and declared by Bob alone and Bob and Sue file taxes separately, I wonder if Sue could buy the new home, vested in Sue and Bob, NTCWRS and pay and declare the interest on her taxes alone. Wonder if that would pass the sniff test for legit.

It's a tax credit - but what are the restrictions on future sale of the property and/or payback of the credit on sale?

[Worried in FL]

We signed to purchase a new home a few weeks ago. We have sold our old home that we lived in and will close on that one in December. The new home is being built and we will not close on it until mid February 2010. Our income level is way lower than the stated income level and the new home is $300,000.

Will we qualify for the $6500. credit? I have read the bill and I don't know. What does purchase mean? Have you not purchased the home until the closing date? Or is the purchase the date of the contract to build?

I appreciate anyone's thoughts on this.

[ziggy29]

Crap. We may be renting out our current house to my FIL if he moves down here and buy a new one in town, but we won't have had this one for five years.

As usual, we're part of the demographic that gets nothing but the bill to pay for it all. And to make matters worse, it would probably cause the prices to rise close to $6,500 to account for the tax break we can't get...

[walkinwood]

So, if I am happy in my home, I don't get anything.

But if I sell it to my neighbor and have them buy my home, we both get $6500? Of course, all the intermediaries like the mortgage companies, title companies and the like take a cut leaving you with not much at the end!

[teejayevans]

Quote:

Originally Posted by walkinwood So, if I am happy in my home, I don't get anything. But if I sell it to my neighbor and have them buy my home, we both get $6500? Of course, all the intermediaries like the mortgage companies, title companies and the like take a cut leaving you with not much at the end!

You got it, the real estate industry has great lobbyists.
TJ

[Notmuchlonger]

Why are we giving tax breaks to buy a damn house? Just let the damn things collapse to proper valuations. Stop propping this stuff up.

Hey and I got a property in bubblelicious California. Absurd what some of the houses still go for in my area. Im so disappointed. I do not have children. But I can damn well tell you all this crap will be passed on to the younger generations. Eventually the price will be paid.

[W2R]

Quote:

Originally Posted by ziggy29 Crap. We may be renting out our current house to my FIL if he moves down here and buy a new one in town, but we won't have had this one for five years. As usual, we're part of the demographic that gets nothing but the bill to pay for it all. And to make matters worse, it would probably cause the prices to rise close to $6,500 to account for the tax break we can't get...

And just by chance, if Frank and I can get our houses on the market pronto, this might help us to sell them faster. Then we can move to Springfield, and maybe (if we really get a move on!) buy our houses there with the $6,500 tax credit. So, if we can hurry all of this up, we'll benefit TWICE - - both in selling and in buying.

What a crazy world.

[nanannjen]

Does anyone know what tax year they will be looking at for the income phaseout? If we buy a house in 2010, I know that you have the option to claim it either on your 2009 or your 2010 taxes - if you claim it on your 2010 taxes, would the income determination be on your 2010 income or your 2009 income?

We are looking to ER and relocate next year - this year we would be knocked out by the income phaseout, but next year, we would obviously have a radical drop in income!

[Moemg]

I have been thinking about selling my house . This may give me the push I need .

[samclem]

I wonder if I could save Congress time by just sending them a synopsis of my finances so they can see exactly what they do not want to subsidize with a taxpayer-funded giveaway. They've gotten it 100% "right" so far and I won't be getting a penny, but why leave anything to chance?

[youbet]

Quote:

Originally Posted by samclem I wonder if I could save Congress time by just sending them a synopsis of my finances so they can see exactly what they do not want to subsidize with a taxpayer-funded giveaway. They've gotten it 100% "right" so far and I won't be getting a penny, but why leave anything to chance?

It does seem that way! We are in an era where focused programs will benefit a few but be paid for by all, directly or indirectly. Those on the receiving end will be more secure in retirement. Those who only pay, less so.

I wish this program was directed more at encouraging new construction as opposed to simply churning the existing stock and earning commissions for real estate agents and finance companies. They must really be "greasing the skids" Chicago-style!