Even though late today, President Obama called the delay to the new stimulus plan “ inexcusable“, it appears as if the stimulus package will pass in some form relatively soon.
One important piece of the plan to anyone who is thinking of buying a home is the $15,000 tax credit for new home buyers along with forgivness of the repayment of the $7,500 tax credit for anyone who bought a home under the currently-in-place plan.
Although nothing has been passed officially into law yet, here are a few of the key items of interest related to real estate in the stimulus bill:
- The $15,000 tax credit can be taken over one year or spread over two years
- The $15,000 tax credit doesn’t have to be repaid
- The $15,000 tax credit will apply for anyone who buys a home – not just first time home buyers
- The $15,000 tax credit is a credit – not a deduction: meaning you will get the full $15,000
- The $15,000 tax credit is the lesser of $15,000 or 10% of the purchase price of the home
- The $15,000 tax credit will be allowed for homes that are bought within one year of if/when the bill is passed
Will this $15,000 tax credit “fix” everything that is currently wrong with today’s real estate market?
But I don’t see how it could hurt-putting money directly into people’s pocket for buying something has shown to be effective in the Auto industry to drive sales – maybe it will work in the real estate industry as well?
For the most recent updates on the bill and for detailed information, The Phoenix Real Estate Guy has done a nice job of presenting a “level 201” outline of what the $15,000 tax credit could mean for the real estate market – and to consumers alike.