$15,000 first-time home buyers tax credit

[StageLeft]

Some are saying it's refundable, some aren't. If it is not, it will make a mild impact on low or moderate incomers who pay limited fed tax anyway. I just did my taxes and despite a solid middle class income, our two kids help bring our burden so low that we don't pay all that much.

Some of the people's responses in this thread are mildly alarming; y'all sound like a kid who just got a big check for his birthday and can't wait to spend it right the hell now, even if he doesn't even want what he's buying. 15k is a bit of a nationally embarrassing step, imo, and if you think its cost of 35B in a 14T economy is going to make any difference at all, you should, well, run for office, because there's always room in gov for delusional people.

This country still doesn't get it. The recession is a diet after a doctor's visit and he tells you to lose weight or you're gonna die. No amount of drugs are going to help you. You need to buck up and lose that fat.

Has nobody noticed that despite almost a year of "stimulus" the country's economy continues to self-destruct? And arguing that "it could be worse" is conjecture sorely lacking in a quantifiable defense.

 

[nobodyknows]

Originally posted by: Ozoned

Originally posted by: spidey07

Originally posted by: WhipperSnapper
Let me see if I understand this.

They're offering home buyers a 10%-of-the-purchase-price rebate in the form of a tax credit up to $15,000 (for a $150,000 home) and you don't have to pay it back?

It's better than nothing but I'm not sure that a savings of $6000 will motivate me to run out and buy a $60,000 condo if I weren't already considering it.

WTF!? Prices are at all time lows right now, coupled with almost never before seen interest rates. Do you want to build wealth or not?

What we have here is the trifecta of wealth building - rates low, prices low, gubment giving you money. You jump on this ship or kick yourself for not taking advantage of it.

I know I will sound like a bad person - but if you don't take advantage of the out of this world opportunities going on right now then don't whine that you can't afford a house or build your wealth. buy, buy, buy time.

-edit-
I'm so freaking giddy right now - it's like the reward for making good decisions financially for so long have finally come back to me. This is so freaking sweet.

It is very nice, to the extent that you have a tax liability. This won't do anything for a family with 3 children, making 45,000 a year.

It might keep the value of their home from dropping and them ending up owing more on their home then it's worth on the market.

 

[Ozoned]

Originally posted by: mugs

Originally posted by: Ozoned

It is very nice, to the extent that you have a tax liability. This won't do anything for a family with 3 children, making 45,000 a year.

Supposedly it's a refundable tax credit - even with zero tax liability, you'd get the $15k.

It's a non-refundable credit.

 

[Aimster]

We'll have to wait and see what it is

 

[Ozoned]

Originally posted by: Aimster
We'll have to wait and see what it is

Here is the actual language

Here is the overview

 

[Aimster]

Yes but if the House and Senate disagree don't they have to agree in the end?

One is refundable one is not refundable, no?

They'll have to come together on some terms.

 

[Ozoned]

Originally posted by: Aimster
Yes but if the House and Senate disagree don't they have to agree in the end?

One is refundable one is not refundable, no?

They'll have to come together on some terms.

All versions limit the credit to the extent of the tax liability, so what does it really matter?

 

[Aimster]

Originally posted by: Ozoned

Originally posted by: Aimster
Yes but if the House and Senate disagree don't they have to agree in the end?

One is refundable one is not refundable, no?

They'll have to come together on some terms.

All versions limit the credit to the extent of the tax liability, so what does it really matter?

That sucks.
I was hoping this was an increase of the current $7500 loan that they have out now, except with no repayment.

 

[wwswimming]

what if you've previously owned a condo, and sold it ?

can you still receive this tax credit ?

that sounds kind of selfish. but, if it's available ...

 

[StageLeft]

Originally posted by: Aimster

Originally posted by: Ozoned

Originally posted by: Aimster
Yes but if the House and Senate disagree don't they have to agree in the end?

One is refundable one is not refundable, no?

They'll have to come together on some terms.

All versions limit the credit to the extent of the tax liability, so what does it really matter?

That sucks.
I was hoping this was an increase of the current $7500 loan that they have out now, except with no repayment.

Yeah it sucks, but doesn't suck as bad as it would have if it was refundable. It's a freaking joke anyway, but giving somebody $15k in a "refundable tax credit" if they only pay $2500 in federal taxes to begin with would have been a real farce.

 

[Gunslinger08]

I claimed the credit for 2008. It would sure be nice if they told me I didn't have to pay it back. I'm guessing there's 0% chance of that happening though.

 

[Phil21]

WTF!? Prices are at all time lows right now

They are? Have a source for this? While this has been trumpted about a lot lately, I honestly am *not* seeing the "deals" that supposedly exist. Could just be my local market I suppose.

5-10% lowering of sale prices IMO is not "all time low". 30 to 50% and then I would consider housing to be in-line with what it probably should be (for this area).

I base this off of "percentage of income spent on housing". Has this really gone down a lot in the last year? At best, on a 15 year mortgage I can save about $40/mo from before the bubble burst.. Not what I would call "game changing" in any way for my financial situation.

So.. I really am interested - are there some areas where housing is depressed at an "all time" low (inflation adjusted of course!)? Sounds like there are some great investments to be had in such areas if so! The numbers for my local area don't even hit 10 year lows, from the limited data I've been able to find Not exactly really that interesting to me - 10 years is not a long time.

Please note again - I'm talking about housing in relation to buying power. Not new house sales, number of houses sold per month, etc. Yes, I would agree those are at or nearing historic lows. The price being paid for the houses that *do* sell however - not so much.

-Phil

 

[runestone]

Yes, I have a question: about ten years ago, after scrimping and saving and living in really crummy apartments and rental homes for about 20 some years, I paid cash for my humble house.
I never saw one dime of a tax break or refund, etc..guess I'm just a chump for paying my bills,,,will I get any kind of a break on this? Not holding my breath.

 

[StageLeft]

Originally posted by: Phil21

WTF!? Prices are at all time lows right now

They are? Have a source for this? While this has been trumpted about a lot lately, I honestly am *not* seeing the "deals" that supposedly exist. Could just be my local market I suppose.

5-10% lowering of sale prices IMO is not "all time low". 30 to 50% and then I would consider housing to be in-line with what it probably should be (for this area).

I base this off of "percentage of income spent on housing". Has this really gone down a lot in the last year? At best, on a 15 year mortgage I can save about $40/mo from before the bubble burst.. Not what I would call "game changing" in any way for my financial situation.

So.. I really am interested - are there some areas where housing is depressed at an "all time" low (inflation adjusted of course!)? Sounds like there are some great investments to be had in such areas if so! The numbers for my local area don't even hit 10 year lows, from the limited data I've been able to find Not exactly really that interesting to me - 10 years is not a long time.

Please note again - I'm talking about housing in relation to buying power. Not new house sales, number of houses sold per month, etc. Yes, I would agree those are at or nearing historic lows. The price being paid for the houses that *do* sell however - not so much.

-Phil

It really is so dependent on market. Evidently since spring 07 median prices in California have gone down 50%. Talk about getting gang banged if you bought one at the peak of that In other areas of the country (not many but a few) they've hardly dropped at all because they didn't raise much to begin with.

Yes, I have a question: about ten years ago, after scrimping and saving and living in really crummy apartments and rental homes for about 20 some years, I paid cash for my humble house.
I never saw one dime of a tax break or refund, etc..guess I'm just a chump for paying my bills,,,will I get any kind of a break on this? Not holding my breath.

In the contemporary American economy you are a bad citizen. Stop this saving and paying with cash garbage and extend yourself. This is what you get for not borrowing to the hilt--nothing!

 

[WhipperSnapper]

Originally posted by: spidey07

Originally posted by: WhipperSnapper
Let me see if I understand this.

They're offering home buyers a 10%-of-the-purchase-price rebate in the form of a tax credit up to $15,000 (for a $150,000 home) and you don't have to pay it back?

It's better than nothing but I'm not sure that a savings of $6000 will motivate me to run out and buy a $60,000 condo if I weren't already considering it.

WTF!? Prices are at all time lows right now, coupled with almost never before seen interest rates. Do you want to build wealth or not?

What we have here is the trifecta of wealth building - rates low, prices low, gubment giving you money. You jump on this ship or kick yourself for not taking advantage of it.

I know I will sound like a bad person - but if you don't take advantage of the out of this world opportunities going on right now then don't whine that you can't afford a house or build your wealth. buy, buy, buy time.

-edit-
I'm so freaking giddy right now - it's like the reward for making good decisions financially for so long have finally come back to me. This is so freaking sweet.

My point was that this probably won't motivate someone who wasn't already interested in purchasing a home to go out and make a purchase. Like you said, now is a good time to buy if you are able (but note the other consideration).

One other consideration is that housing prices are still disconnected from reality in some parts of the country and prices could still drop significantly, especially if the current economic malaise becomes an outright depression. Prices seem to have decreased noticeably in my area in the past six months; who's to say that they won't continue to decrease or decrease precipitously in the coming six months?

One other factor that might keep some people from purchasing is the possibility of wanting to relocate in the event of a job loss.

 

[43st]

Originally posted by: runestone
Yes, I have a question: about ten years ago, after scrimping and saving and living in really crummy apartments and rental homes for about 20 some years, I paid cash for my humble house.
I never saw one dime of a tax break or refund, etc..guess I'm just a chump for paying my bills,,,will I get any kind of a break on this? Not holding my breath.

You aren't the type of customer that makes wads of cash for banks.. since you avoid there little ponzi scheme don't expect banking lobbyists to go out of there way for you either. Check out the new Fico rules.. that will boil your blood even more.

 

[bobcpg]

Originally posted by: Phil21

WTF!? Prices are at all time lows right now

They are? Have a source for this? While this has been trumpted about a lot lately, I honestly am *not* seeing the "deals" that supposedly exist. Could just be my local market I suppose.

5-10% lowering of sale prices IMO is not "all time low". 30 to 50% and then I would consider housing to be in-line with what it probably should be (for this area).

I base this off of "percentage of income spent on housing". Has this really gone down a lot in the last year? At best, on a 15 year mortgage I can save about $40/mo from before the bubble burst.. Not what I would call "game changing" in any way for my financial situation.

So.. I really am interested - are there some areas where housing is depressed at an "all time" low (inflation adjusted of course!)? Sounds like there are some great investments to be had in such areas if so! The numbers for my local area don't even hit 10 year lows, from the limited data I've been able to find Not exactly really that interesting to me - 10 years is not a long time.

Please note again - I'm talking about housing in relation to buying power. Not new house sales, number of houses sold per month, etc. Yes, I would agree those are at or nearing historic lows. The price being paid for the houses that *do* sell however - not so much.

-Phil

I see that you live in Minnesota. I am also in the market for buying my first house in the Hopkins area and could not agree with you statement more.

Yes we see a little drop in housing prices but I am still looking for all these "DEALS" people keep taking about. All this especially in terms of Price vs. Buying power.

 

[bobcpg]

Originally posted by: runestone
Yes, I have a question: about ten years ago, after scrimping and saving and living in really crummy apartments and rental homes for about 20 some years, I paid cash for my humble house.
I never saw one dime of a tax break or refund, etc..guess I'm just a chump for paying my bills,,,will I get any kind of a break on this? Not holding my breath.

Don't worry there are plenty others that have your same feelings, like me. Sadly, if you are worried about your tax money being wasted to keep people afloat there are worse things the gov't is spending it on.

 

[senseamp]

Originally posted by: joshsquall
I claimed the credit for 2008. It would sure be nice if they told me I didn't have to pay it back. I'm guessing there's 0% chance of that happening though.

Sell your house to a relative, then buy it back and pocket 15K.
That is what people are going to use this idiotic provision for.

 

[WhipperSnapper]

Originally posted by: senseampSell your house to a relative, then buy it back and pocket 15K. That is what people are going to use this idiotic provision for.

Good idea. It looks like you found the loophole.

 

[senseamp]

Originally posted by: WhipperSnapper

Originally posted by: senseampSell your house to a relative, then buy it back and pocket 15K. That is what people are going to use this idiotic provision for.

Good idea. It looks like you found the loophole.

You can thank Paul Krugman for digging it up
http://www.nytimes.com/2009/02...on/09krugman.html?_r=1

On the other hand, the centrists were apparently just fine with one of the worst provisions in the Senate bill, a tax credit for home buyers. Dean Baker of the Center for Economic Policy Research calls this the ?flip your house to your brother? provision: it will cost a lot of money while doing nothing to help the economy.

 

[child of wonder]

Originally posted by: bobcpg

Originally posted by: Phil21

WTF!? Prices are at all time lows right now

They are? Have a source for this? While this has been trumpted about a lot lately, I honestly am *not* seeing the "deals" that supposedly exist. Could just be my local market I suppose.

5-10% lowering of sale prices IMO is not "all time low". 30 to 50% and then I would consider housing to be in-line with what it probably should be (for this area).

I base this off of "percentage of income spent on housing". Has this really gone down a lot in the last year? At best, on a 15 year mortgage I can save about $40/mo from before the bubble burst.. Not what I would call "game changing" in any way for my financial situation.

So.. I really am interested - are there some areas where housing is depressed at an "all time" low (inflation adjusted of course!)? Sounds like there are some great investments to be had in such areas if so! The numbers for my local area don't even hit 10 year lows, from the limited data I've been able to find Not exactly really that interesting to me - 10 years is not a long time.

Please note again - I'm talking about housing in relation to buying power. Not new house sales, number of houses sold per month, etc. Yes, I would agree those are at or nearing historic lows. The price being paid for the houses that *do* sell however - not so much.

-Phil

I see that you live in Minnesota. I am also in the market for buying my first house in the Hopkins area and could not agree with you statement more.

Yes we see a little drop in housing prices but I am still looking for all these "DEALS" people keep taking about. All this especially in terms of Price vs. Buying power.

My mother is a real estate agent in Northfield and, trust me, there are some deals out there.

She showed me a listing for a 4 bed, 3 bath, 2200 sq ft house for $135k. Built in 2002 IIRC.

 

[senseamp]

150K will maybe buy a doghouse in my area. Sellers will also likely demand higher prices knowing that they are offset with rebates. It's just another gimmick to keep the bubble going, instead of letting the market find its bottom so we can move on from there.

 

[Phil21]

My mother is a real estate agent in Northfield and, trust me, there are some deals out there.

She showed me a listing for a 4 bed, 3 bath, 2200 sq ft house for $135k. Built in 2002 IIRC.

Er.. but that's Northfield Isn't that pretty much what they were going for in.. 2002?

I recall (only hazily though) looking at housing in the Bell Plaine area (a bit closer to the cities than Northfield) and seeing houses for around that, in similar sizes (with huge 2 acre yards and the like)

I think that's pretty normal for any country housing though, and not unique to MN in any way. You could always get 150% off if you wanted to live 60 miles out of town

I'm talking about that exact house, before the crash vs. currently. Perhaps Northfield was a huge bubble and that house used to be worth double. I can't really find any stats for that area. But for the Twin Cities, as bobcpg said - I have not seen much decrease at all, nothing close to what I would call bringing housing back into the realm of affordability for the average person/family. And no, I do not consider spending 60% of your net income on housing "affordable"

So.. consensus here is that some areas have been very hard hit, and most other areas not so much. Makes sense to me, and is more or less what I've been seeing myself.

-Phil

 

[bobcpg]

Originally posted by: child of wonder
<snip>

My mother is a real estate agent in Northfield and, trust me, there are some deals out there.

She showed me a listing for a 4 bed, 3 bath, 2200 sq ft house for $135k. Built in 2002 IIRC.

Its Northfield. No where close to the city as Hopkins or New Hope.