Tax Credit - Final Details (Apparently!)

After some confusion and mis-reporting, the final details of the new tax credit have been released. Note that although this is now the "agreed compromise" by all sides of Congress, it has yet to be finally voted on, and then signed off by the President.

If you want to read the full text of the official press release for the Stimulus Package, it is here (the part relating to the home buyer credit is on page 2): American Recovery & Reinvestment Act of 2009.

But in a nutshell, here are the basics - very different from the original broad-ranging $15k credit added to the bill by the Senate:

- a refundable tax credit of 10% of purchase price or $8,000, whichever is less (which I believe means that if the tax payer's tax liability is insufficient, then a refund will be issued for the balance)
- for first time home buyers only (defined as those who have not owned a home during the previous 3 years)
- purchases between January 1, 2009, and November 30, 2009
- NOT repayable unless home is sold within 3 years
- credit reduced for couples earning over $150k and single filers earning over $75k

Effectively, the existing $7,500 first time buyer credit (due to expire June 30) has been increased to $8,000, extended to November 30, and converted from a 15 year interst-free loan, into a genuine non-repayable credit (unless you sell within 3 years).

Personally, I don't think this is enough to provide the stimulus we were looking for in the housing market. But at least if a first time buyer wishes to take advantage, they now need to get off the fence. We will see . . .