With the change in the Federal administration has come hope that the $7,500 first-time home buyer tax credit—discussed in my last two posts—may have its 15-year repayment requirement removed.
Kenneth Harney wrote in yesterday’s Sunday Columbus Dispatch that Congress is seriously considering the move.
That would substantially increase the attractiveness of the tax credit and will likely boost home buyer interest in the next few months.
Should you give the $7,500 home-buyer tax credit a second look?
Now that Congress might be on the verge of transforming it into a true tax credit — one that never has to be paid back — you just might want to do so.
On Jan. 15, the House Democratic leadership outlined its $825 billion economic stimulus package, loaded with $275 billion in tax cuts and $550 billion in new spending on health care, education, alternative energy and infrastructure improvements.
Tucked away in the tax section was a significant improvement to July’s congressional effort to stimulate home sales.
That program offered a credit of up to $7,500 to purchasers who had never bought a house or hadn’t owned one during the previous three years.
To qualify, taxpayers would need to close on a house between April 8, 2008, and July 1, 2009.
But relatively few consumers were attracted to the plan because, unlike virtually all other federal tax credits, this one had to be repaid in full during a 15-year period.
In effect, the $7,500 was more like an interest-free installment loan from the government than a straightforward dollar-for-dollar reduction on buyers’ tax bills.
You can find the complete article here: http://tinyurl.com/harney
