A Much-Improved Home Buyer Incentive
By Robert Freedman, Senior Editor, REALTOR® Magazine
Trying to get details yesterday on what House and Senate conferees did and didn’t include in the $790 billion economic stimulus legislation working its way through Congress was a challenge–and not just for those of us who don’t work on Capitol Hill. The back-and-forth of negotiations was so rapid-fire that it seemed no single office had the conclusive take on what would be in the final bill.
With the dust having settled somewhat, NAR analysts say the bill contains several NAR-backed changes to the home buyer tax credit, including an increase in its size, from a maximum $7,500 to a maximum $8,000 ($4,000 for married households filing separately). News reports had conflicting takes on this yesterday, with some identifying the $8,000 limit and others saying it remained at $7,500.
In any case, one of NAR’s top priorities for the tax credit was to get the repayment feature removed, and the conference report does that, for home purchases in 2009. Buyers also have to hold onto the house for at least three years. That’s a safeguard against speculators.
NAR also wanted the life of the credit expanded, and the conferees provided that by making the credit available for all of 2009. Right now it’s set to terminate at the end of June.
A couple of things remain the same. One, the credit remains refundable, which means you can get the balance of the credit sent to you in a check from the federal government if your credit exceeds your tax liability. And two, if your buy a house this year, you can elect to claim the credit on your 2008 tax return. That enables you to realize the benefit on your taxes as soon as possible.
If both the House and the Senate pass the final bill today, as they’ve been talking about, and if President Barack Obama signs the legislation into law by Monday, we could know by Tuesday the final details of the tax credit and other pieces of the legislation that REALTORS® have been advocating for, including the increase in conforming and FHA high-cost loan limits.