murray

$8K buyer tax credit extension possible

WASHINGTON – Aug. 24, 2009 – Bills to extend the maximum $8,000 tax credit for first-time homebuyers, which expires Nov. 30, are pending in both the U.S. House and the Senate.

Sen. Christopher J. Dodd, a Connecticut Democrat and chairman of the Senate Banking, Housing, and Urban Affairs Committee, is co-sponsor of a bill with Georgia Republican Sen. Johnny Isakson that would raise the credit amount to a maximum of $15,000.

Senate Majority Leader Harry M. Reid of Nevada favors an extension of the current credit. He was quoted by the Las Vegas Sun saying, “It’s something we can get done.”

Odds are that the credit will be extended and broadened to cover all buyers next year, but the chances of the amount increasing aren’t as good, observers say.

Source: Washington Post Writers Group, Kenneth R. Harney (08/22/2009)

© Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688

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ray

Screw this socialistic handout country.we're a broke country giving out money we don't have.watch and learn as interest rates sky to 7-15% over the next 2-10 years as out debt balloons to $15 trillion and we can't make our interest payments and default. our country has changed forever and economic activity will be slow and recession like for years to come. we're another japan with a down to sideways stock mkt and economy for as far as the eye can see.if printing money to solve problems worked all country's would do it.i expect mass protests in the capital and mass non tax compliance in the years to come

SWGB

Yep that'll learn 'em.

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Miss Kitty

Wonder how many young'ens have a new car from clunker cash parked in their new driveways and how many of them used the $8,000.00 + $4500.00 to buy a car out of their means? Oh, have mercy...my head hurts.

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The mind is like a parachute, it works best when it is open.

SWGB

MK the $8,000 is a tax credit, not cash.

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Miss Kitty

...wtf is a tax credit?

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The mind is like a parachute, it works best when it is open.

SWGB

Ask Mr. Kitty, it might just cure your sleep issues.

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Smiling JOe

I'm not an accountant, but my understanding is that a tax credit is a check for $8,000, not a deduction on your gross earnings.

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30ashopper

Correct, it reduces your taxable income by an amount. So you don't have to pay taxes on 8K you normally would. The amount you save depends on your upper income tax bracket. 28% would be around $2300.00, 25% = $2000.00, 15% = $1200.00.

Smiling JOe

Thanks. The confusing part of it is that the Feds are allowing it to be used to apply toward the closing costs of the purchase, but the problem is that there isn't money to directly fund it. So, if a buyer can apply it toward the closing costs, the scenario is slightly different than a tax savings. It becomes a cash out of pocket savings.

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Bob

it is a dollar for dollar reduction in the amount of income tax owed.

Bob

Federal Housing Tax Credit for First-Time Home Buyers: Frequently Asked Questions

ClintClint

Thank you Bob! There are some very insightful posts in many threads in this Real Estate Discussion. They are invaluable to us in reading the "pulse" of the market and info you can't (or won't) get from the professionals. But, there are many well intentioned but ill informed posts when it comes to tax and/or legal advice.

30ashopper

Wow, that's pretty amazing. It's a complete give away of 8K, with some income limits. No wonder we've seen a spike in sales. I wonder if Congress will renew it to keep juicing the system or let it expire?

Franny

In the news there is talk of extending the 8k and opening it up to everyone..we will see.

Smiling JOe

I'm not so sure that the $8000 tax credit for certain qualifying buyers is the reason for the boost in sales. You have to be a first time home buyer (by their loose definition) and the home must be your primary residence. (those aren't the majority of homes in our mostly second-home community). It is my belief that the reason for the increase in sales is due to some sellers finally coming to terms and pricing property at a level where buyers find value. A tax credit of $8000 has no value if a home is overpriced by $200,000. The right price is selling property, not tax credits. However, a tax credit and very low interest rates make home buying more exciting.

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tidewater

Stop predicting the the sky is falling.
Have you heard, Japan is having a very nice recovery. In fact, the first among of all other nations.

Lynnie

I think Japan had it pretty rough for about a decade and threw yen after yen to stimulate their economy.....new construction to stimulate, etc.

Back to the USA: with the tax credit however, last year it was $7,500 and this year $8,000.....extended only until Nov. 30, right? Has it been extended from that date, yet?

I haven't paid attention to how it is similar or different to last year's tax credit.......

It seems I did read recently that homes sales were up slightly. Can anyone confirm that?

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Who is Lynnie?? ~~~~~~~Signed, All Y'all

ray

tidewater maybe you didn't here the sky already fell for the 10% unemployed.japan has had a nice recovery?you must be hiding under a rock. japan has been in a deflationary spiral for 20 years. there stock market is down 80% from 1989. the reason why is the same path the usa is taking. because we couldn't make the tough decision and let weak co's fail we've propped them up employing huge borrowing of $12 trillion we don't have. this is called a misallocation of capital(using money that should go toward productive assets instead goes to prop up dying co's that will fail anyway). this misdirection of capital actually impedes the growth of the economy long term(an example is japan who has had zero interest rates for 20 years and almost no growth). america is now starting down the same path. japan overconsumed in the 1980's as has the us has for 30 years. now comes the retrenchment in the usa were americans must live within there means which means spending much less and paying massive debt down.what does this mean for the economy longer term? its not very bright as we have such an overcapacity in such areas as retail and restraunts that eventually many fo these co's must go bankrupt to adjust supply and demand to the new economy.but our gov't refused to take the short term pain and allow the strong to survive and weak to perish thus flushing the system and making it stronger. instead they flooded the system with printed dollars thus in the short term saving a few co's and crushing our currency and reducing our standard of living and buying power going foward. this will backfire badly as over time foreigners will shun the weakening $ causing interest rates to rise over time as in order to attract foreign capital we'll have to entice buyers with higher rates.in addition with a $12 trillion debt now comes the back end of much higher taxes to pay the debt down thus impeding growth for years to come.just a small overview of whats happend the past 12 months.

Lynnie

I think this is spot on. We follow the Nikkei because they open before our markets and we can guage by their trading, etc.....which BTW has also been over the 10,000 mark for two days.



Anyway, has our home sales increased slightly over the last few months? There is a push and sense of urgency for first time home buyers and this tax credit. Int. rates are hovering around 5%, which is amazing. First time home buyer by Fannie/Freddie and FHA is defined as one who hasn't had home ownership in the last three years. Lookback on BK and foreclosure is 3 yrs and 2 yrs respectively.......so, timing could be perfect for many.

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Who is Lynnie?? ~~~~~~~Signed, All Y'all