New homebuyer tax credit cut in half

There is good news and bad news from the "compromise agreement" for the stimulus package finalized yesterday in Congress.

The good news - a tax credit for home buyers at 10% of purchase price is part of the package. The bad news - the $15,000 maximum proposed by the Senate has been reduced to $7,500. Better than a kick in the pants, but maybe not the jump start that we were hoping for.

This is NOT the $7,500 credit already in place from last year, due to expire this coming July 1. That was only for first time buyers, and was effectively a 15 year interest-free loan. This new credit will be available to all buyers of a primary residence, and will not be repayable unless the property is sold within 2 years. Full details should be available soon.