Proposed Stimulus Bill–Home Buyer Tax Credit

 It’s important to remember that the proposed credit is far from becoming a done deal. The bill still has many hurdles that need to be address, as well as, the unknown which keeps popping up everywhere in our economy these days.  If it passes we could see some encouragement for the current buyers with a possibility that if you buy in 2009 you can take the credit on your 2008 taxes.  Your lender may have more news as soon as March 4th on this.

Here are some more Frequently Asked Questions but understand if and when the bill gets passed these answers may change.

If I bought a home and used the $7,500 home buyer tax credit, can I retroactively receive $15,000 credit if it becomes law?
No.

Are there any income restrictions on the tax credit? Currently there are no restrictions in place for the future bill.   

When will the new tax credit go into effect? When the bill is signed.

Can I take the tax credit this year? Yes. The proposal would allow buyers (even those who purchase in 2009) to claim the credit on their 2008 taxes.

The proposed tax credit is nonrefundable. What does that mean? You can only receive the credit to the extent that you owe federal income taxes. The Senate proposal would give home buyers two years to claim the credit.

Are there any repayment requirements on the tax credit? No.

If I am eligible for the current $7,500 credit, am I also eligible for the $15,000 credit? While the $15,000 credit has fewer restrictions than the existing credit, there is one big difference: because the credit is nonrefundable, if you have a low federal income tax liability, you could end up receiving more money with the current credit than the larger, proposed credit.

Can I use the tax credit to buy a second home? No.

How long do I have to live in my home after I purchase it with the tax credit? Credit has to be “paid back” if you sell the home within two years.

Remember all of this is PROPOSED.  So check with your tax attorney prior to making any decisions.

Mary on Maui

Century 21 All Islands-Wailea

Your Maui Realtor

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