If I offered you $15,000, is that something you might be interested

might motivate me to buy a ski lodge or beach house

So they're reducing the average house resale price by $15k? how clever of them!

income cap? First time buyer? Primary only?

I think it's $15K or 10% of the purchase price, whichever is lower. Primary residences only, which probably means the address has to match the address on your tax filing. New construction or resale (an improvement on the "new homes only" version, which was an obvious giveaway to the housing industry). Didn't see any other restrictions in the House bill.

In areas where a house costs $150K, this measure could have significant impact.

What's the effect on a $1MM Manhattan apartment? Clearly, no more than 1.5%, and probably less. It might push forward some sales that would have happened later.

Oh boy! No sellers will ask $15,000 more than before. THis does nothing to make prices more affordable.

Not particularly smart at all.

When that credit disappears, the value of your recently acquired property will fall by $15K.

Looks good in newspapers. Means nothing.

In parts of the country that's a downpayment...it seems it will cause the same problems as before, people who cannot afford to buy now have the downpayment but can they make their monthly payments.

There was no mention of salary cap... any idea? I'd be surprised the democrats would support the tax credit without a salary cap

From what I understand it's sort of a tax loan not free money, you have to pay it back over time.

"In parts of the country that's a downpayment...it seems it will cause the same problems as before, people who cannot afford to buy now have the downpayment but can they make their monthly payments."

This will end up being priced into the homes.

Although, the ability to make a down may be a bit of a game changer.

Right but I'm pretty sure it's something you get when you file your taxes after the purchase.

"From what I understand it's sort of a tax loan not free money, you have to pay it back over time."

The current one ($7,500) is an interest free loan, this one is not--you get to keep it. I read the senate version--didn't seem to have a salary cap, and was "retroactive" for all of 2009 (i.e., purchasers should not wait for it to pass if they are buying anyway--they will still get the credit)

JustAnotherNewYorker--can you cut and paste maybe where you read this because last week it was a different bill. It could have obviously changed but I would definitely like to know if its no longer and loan.

This sounds good in theory, but perhaps sellers will just jack up their homes by 15k... who knows..

The government should instead focus solely on anything that 'creates' jobs, if I were to feel more secure about my current and future employment, this would motivate me much more than tax gimmicks..

Go here:

http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR00001:

click on "amendments", Amendment 106 (by Isakson) on line 20. Then on page 1442

Note that it doesn't say you need to pay it back (unless you resell the house), but doesn't explicitly say you don't. People seem to be reading it that you don't, especially as they decrease your cost basis by the amount of the credit, which wouldn't make sense if you paid it back.

see here: http://www.bizjournals.com/atlanta/stories/2009/02/02/daily76.html

"Right but I'm pretty sure it's something you get when you file your taxes after the purchase."

You can elect to apply the credit to your 2008 taxes. So that's $15k less to pay in April 2009.

"You can elect to apply the credit to your 2008 taxes. So that's $15k less to pay in April 2009."

You can apply the credit to your 2008 taxes only after you actually buy in 2009 from what they have on the table right? It's a little confusing but I'm reading that it can't be used as a 15K downpayment as the purchase has to come before the credit.

Julia,
most lenders are currently asking for 20% down at the very least. In those terms, 15K would be the down payment on a 75K house. The only part of the country that's currently feasible is Youngstown, OH, I think.

Copy here http://graphics8.nytimes.com/images/promos/politics/blog/04blog-isakson-amendment.pdf

kimerama -- Yes it does look like that you have to purchase before you file your 2008 tax returns to get the benefit this year. For people hoping to rely on this for downpayments, it would help only if you otherwise would have owed taxes on your 08 return and you already set aside that cash for the IRS.

hvd_free: yes. But here's the question I have. It says:

(3) ALLOCATION OF CREDIT AMOUNT.—At the election of the taxpayer, the amount of the credit allowed under paragraph (1) (after application of paragraph (2)) may be equally divided among the taxable years beginning with the taxable year in which the purchase of the principal residence is made.

Doesn't that mean you make the purchase in 2009 and you get the credit when you file for that taxable year in 2010 (or years actually since it talks of a split so 2010 and 2011)?

Also it's effective:

after the date of the enactment of the American Recovery and Reinvestment Tax Act of 2009

meaning the day it's passed? So it's not retroactive basically?

kimerama -- I think this is the relevant language:
‘‘(h) ELECTION TO TREAT PURCHASE IN PRIOR YEAR.—In the case of a purchase of a principal residence during the period described in subsection (b)(1), a tax payer may elect to treat such purchase as made on December 31, 2008, for purposes of this section.’’.

Ah thanks. Didn't get that far into it. Well hey I guess we'll see if this fully passes or not.

But just to clarify, this allows you to treat the purchase as if it was made in Dec of 08 so that you can enjoy benefits when filing in 09, BUT it seems to still clearly state that the purchase must be made after the date of enactment. I'm not sure when that date would be but if it's not soon, I would imagine there will be a lot of extensions requested.

15Gs'.................I'll take that.
Every little bit helps.
Totally meaningless on the island of broken investment dreams.
Thanks Uncle O, that will help defer the moving costs.

http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?position=all&page=S1442&dbname=2009_record

"(1) DATE OF PURCHASE.—The credit allowed under subsection (a) shall be allowed only with respect to purchases made— (A) after December 31, 2008, and (B) before January 1, 2010."

This part here is different from Suzzane's link. Not sure which one was the version passed by the senate.

This would be based on the closing purchase, correct? Am I correct to assume that the date of signed contract is meaningless.
I went into contract in April 08 and will close in June 09. That credit will be sweet and would be amazing if I could take it this year.

Interesting difference between the versions. Suzzane: Where did your link come from (which article?) If we have the source, we may be able to figure out the timing of the two versions and which one was passed.

And 11201, yes, closing should be the relevant event.

JustAnotherNewYorker: I think your version (and mine) is the original SA 106 submitted to senate and was put on earlier records. Suzzane's is "SA 106 as modified" which was passed last night. Isakson apparently modified the dates in the latter. In other words buyers will only get the $15k if they close after the stimulus package is enacted.

That's sort of ... dumb. This may actually have a short-term deal-breaking effect as buyers will now push to try to close after enactment. The pols had to know this sort of thing would leak and cause a stir so it'd just be smart to make it retroactive.

there is a loophole which rips off all tax payers:

In a family situation, parents could sell each other their homes (essentially swapping) homes with their children (assuming both have homes) and both will get the 15k. After 2 years, swap back..

Many immigrant families have tight family bonds and trust would not be an issue here...

Am I missing something here? Does the bill swap this kind of fraud?