Economic Stimulus Bill – $15,000 Tax Credit For New Home Buyers

It appears that later this week, some form of an economic stimulus package will pass and one of the most talked-about items in the bill is the “15,000 tax credit for new homebuyers“.

For anyone who is thinking of buying a home in the next year, you will want to pay attention to the details of this plan once it passes. In addition to the “new” $15,000 tax credit, there is a possibility that the existing $7,500 tax credit (that is really a loan that must be paid back over time) will turn into a credit and not a loan.

Although nothing has been passed officially into law yet, here are a few of the key items of interest related to real estate in the stimulus bill:

• The $15,000 tax credit can be taken over one year or spread over two years
• The $15,000 tax credit doesn’t have to be repaid
• The $15,000 tax credit will apply for anyone who buys a home – not just first time home buyers
• The $15,000 tax credit is a credit – not a deduction: meaning you will get the full $15,000
• The $15,000 tax credit is the lesser of $15,000 or 10% of the purchase price of the home
• The $15,000 tax credit will be allowed for homes that are bought within one year of if/when the bill is passed

Will this $15,000 tax credit “fix” everything that is currently wrong with today’s real estate market? No, probably not.

But I don’t see how it could hurt-putting money directly into people’s pocket for buying something has shown to be effective in the Auto industry to drive sales – maybe it will work in the real estate industry as well?

Arizona Mortgage Rates for February 10 2009