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$15,000 homebuyer credit not in conference bill
February 13, 2009
The $15,000 credit for buying a principal residence that was in the Senate version of the stimulus monstrosity died in conference. There is no "Section 25E" credit in the new bill.
The conference bill instead increases the existing "first-time homebuyer" credit to $8,000, from the prior $7,500, and extends the deadline to buy the house an extra six months, to the end of 2009.
The bill has a very strange provision. The existing credit, as enacted in Code Section 36, requires the credit to be repaid over 15 years, so it functions as an interest-free loan instead of a straight subsidy. The new credit gets rid of the repayment requirement, but only for homes purchased in 2009. Those who bought their "first" homes after the April 9, 2008 effective date, but before 2009, remain on the hook. Sorry, chumps!
The conference bill allows homebuyers to use the credit if they buy a home financed with mortgage revenue bonds, but only starting in 2009.
UPDATE, 2/17: more here.
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Comments
Okay, if I put onto a 2008 tax return this credit to be paid back for a home purchased in 2009 and now they have this legislation, can I go back and amend the 2008 tax return taking the credit back off so I can put on the 2009 tax return and not have to pay back?
Jeff Day EA
Evansville, IN
Posted by: Jeff Day | February 14, 2009 12:24 AM
The amendment to Section 36 increasing the first-time homebuyer credit to $8000 and eliminating the recapture provision applies to all qualifying home purchases occurring during 2009, without regard to whether the taxpayer elects to treat the 2009 purchase as occurring on Dec. 31, 2008.
So the short answer to your question is, yes, you can amend your 2008 return and claim the credit next year, but there is no reason to do so. Assuming you closed on your home in 2009, your 2008 credit will be increased to up to $8000 and there is no requirement to repay it.
To see for yourself, go to http://taxprof.typepad.com and open the .pdf of the statutory language and conference report of division B.
Taylor Berger
Posted by: Taylor Berger | February 15, 2009 9:47 AM
This seems to be a very poor decision on the part of the government. I have actually taken advantage of this provision because I bought my home in 2008. Giving a "loan" to encourage home buying is one thing. To give away money seems that I will not only be paying back my $8000, but I will also being paying for all the first time homebuyers of 2009. I feel like I just got screwed. I feel as though I too bought a home in an uncertain economic time. Bad bad bad!
Posted by: Matt H | February 17, 2009 2:19 PM
2009 buyers will be relieved of the obligation to repay $8000 after 3 years in their house. That's a helluva bargain. Sorry 2008 buyers. You have to pay back ALL of your $7500.
The initial first time stimulus calls for payback of the credit in 15 years no matter when you sell your house.
Way to go Washington. How about EVERYONE paying back what they owe. Hmmm what a radical concept.
Geez I guess I missed out. I'm one of the idiots who paid my debts and did so without "stuff" in the process.
By the way don't forget to run out and buy a $30000 car to get a relatively tiny "in the pocket" deduction.
Can't wait til they help me/us again. I'm retired and bubbling over with pride that I prepared for my golden years.
What I did was provide a renewed tax base for the trillions to be paid back. Ooooops there goes that radical concept again.
Posted by: Frank Esposito | March 5, 2009 5:45 PM