Final Update -- The 2009 Economic Recovery Act passed without the $15000 tax credit. However, the new law includes an $8000 tax credit for first-time homebuyers that does not have to be repaid.
2/11 Update - 10:30p EST - The Lieberman-Isakson $15000 tax credit has been removed from the 'final' bill during negotiations between the House and Senate. There is discussion that the $7500 tax credit will not have to be repaid. I am looking for confirmation of this. Regardless, first-time home buyers need to act before July 1st to take advantage of the credit.
2/11 UPDATE- 8:00am: The Senate passed their version of the Ecomonic Stimulus Package yesterday and the $15000 tax credit for homebuyers was included. Now, the House and Senate need to get together and reconcile the differences in their respective bills.
Orginal Post....
Last night the Senate voted to include a $15,000 tax credit for homebuyers into the 2009 Economic Stimulus package. This amendment was proposed by Senators Lieberman and Isakson and is significantly different from the current $7500 tax credit available to first-time homebuyers. (See chart for details). If the amendment survives the House vote, it will really drive the housing market.
I will keep you informed with respect to the bill's progress, but you need to seriously consider your plans for the future. This may well be the best opportunity you ever have to buy a home, trade-up, and or create wealth. Don't miss out.
Key Points:
1) At this point, the Lieberman/Isakson amendment applies to ANYONE purchasing a home for a primary residence.
2) The $15,000 does not have to be repaid.
What does this mean for the Louisville Real Estate Market?
1) If you are considering selling, get prepared now. Find a knowledgeable agent who knows how to promote your Louisville home and begin cleaning and decluttering. If this passes (very likely), buyers will jump from the fence and start looking. You want to be ready before anyone else.
2) If you are considering buying, don't wait. If the amendment survives, the purchase period is retroactive to Jan 1st. Therefore you will still qualify. If you wait, the amendment fails, and the current legislation expires; you could miss out on everything. Additionally, upon passage, more buyers will enter the market. More buyers = More Competition = Higher Prices.
Regardless, call, txt (502-921-3989) or email me now and I can advise you on your specific circumstances.
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Erik Hitzelberger is a licensed real estate agent with RE/MAX Alliance in Louisville. If you need a Louisville Real Estate agent please email me or call 502.921.3989.
I specialize in the following areas of the Metro Louisville Area: Jeffersontown (J-Town), Okolona, Fern Creek, Shepherdsville, Mt Washington, Hillview, Brooks and Pewee Valley. Click the following links to learn more about Louisville and Bullitt County Real Estate or to Search for Louisville Homes.
I hope this will do something to get the fence sitters down and moving.
Shelton
Allen - If someone won't buy with ~5% interest rates, great selection, great pricing and a $15,000 gift; they might as well admit to be lifetime renters.
Erik - The tax credit lowers taxable income, correct? Like a deduction?
This is a succinct summary of the situation right now - one of the best I've read.
Wendy - I read this as a $15,000 credit applied in the same manner as the $7500 credit. Here is the actual text from the opening of the Lieberman-Isakson amendment ... "In the case of an individual who is a purchaser of a qualified principal residence during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to 10 percent of the purchase price of the residence."
Additionally, it references replacing the $7500 credit in later sections and specifically prohibits claiming both.
Garreth - Thanks. This really is a strong incentive for buyers and sellers to get back into the real estate market.
Are you sure that the new 15000 tax credit applies for purchases beginning Jan 1, 2009? I have read several sources (not official) that it begins from the date of enactment. If this is true, what is that day? Is it when the stimulus plan was voted and passed, or is it after the details are all ironed out? Thanks.
Andrew: I heard the same thing, that the start date is the date of enactment. Things were still pretty fluid when this was written.
Andrew, Garreth - The language in the original amendment regarding the effective date was, "Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2008"
Obviously, you cannot claim the credit until it actually becomes law. Perhaps that is where the discrepancy comes from.
Erik: Thanks for staying on top of this.