New Home Buyer Tax Credit: 7 Things You Need to Know

What does Tax Credit really mean for me?

I am a first time home buyer purchasing a $71,000 home.

I will be receiving a IRS refund and State refund from my

payroll withholding. BUT - - will I actually see anything

of the $7,000 tax credit in my 'pocket'????

Beverly Fowler of KS @ Nov 13, 2009 23:38:54 PM

Carmen Arruda on 8000 dollar tax credit.

Check out this story about the extension of the housing tax credit:

http://abclocal.go.com/wabc/story?section=news/politics&id=7087955

If you want to skip it, here's the interesting part (which they do not explain in detail):

1,400,000 homebuyers have taken advantage of the tax credit.

The story specifically states that NAR estimates that 350,000 of those wouldn't have purchased without the tax credit, meaning 1,050,000 would still have purchased without the tax credit.

This means the total cost of the program breaks down like this:

1,400,000 x 8,000 = $11,200,000,000 (11.2 BILLION)

This means the total cost to give the 350,000 people who wouldn't have purchased a home without the tax credit was the 11.2 Billion; which means:

11,200,000,000 / 350,000 = $32,000 per transaction

So:

It cost $32,000 for each individual who got the $8,000 tax credit, to motivate them to purchase a new home.

Wow.

Carmen Arruda of WA @ Nov 12, 2009 16:27:49 PM

Hello

This makes me remember something my dad would always say...

Of course it is definitely inappropriate right this moment...

Kenneth Price of AL @ Nov 11, 2009 13:47:52 PM

TO JULIE OF OR

If you live in the home as your main residence for at least 3 years consecutively you will not have to recapture or repay. If you sell the home within 3 years, yes, you will be repaying the loan

joyful of AL @ Nov 11, 2009 13:10:22 PM

2009

I sold my house in May of 2008 after getting married in April 2008. My wife and lived in her house for a year, sold in April 2009. We closed on OUR first house in August 2009 but it seems the dates of both Tax Credit deadlines leave us out of luck and out alot of money. Comments as to why we are not eligible or if we ever will be would be greatly appreciated

John Walsh of NY @ Nov 09, 2009 21:42:11 PM

Re: Down Payment

Thank you 1stimebuyer. But Wouldn’t I have to actually close on the house before I can file for the amended return on the $8,000 tax credit? The bank will not even finish the loan until I come up with the $2800

Rome of MS @ Nov 08, 2009 00:23:44 AM

RE:Down Payment

Rome of MS-Just file an ammended return of your 2008 taxes and you will receive the money to put towards your down payment.

1stimebuyer of PA @ Nov 06, 2009 23:56:45 PM

Recaptured Tax Credit

Does this credit need to be returned if one sells the principal residence or moves?

Julie of OR @ Nov 06, 2009 15:07:10 PM