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First Time Homebuyer’s Credit Likely Expanded

October 29, 2009 · 18 comments

You know what they say in Congress, if it’s not broke (enough), keep trying until it is…

So, with that in mind, Senate Majority Leader Harry Reid (D-NV) has announced an extension of the first time homebuyer’s credit.

Despite evidence that the credit has been used inappropriately – and perhaps criminally – lawmakers have agreed to extend the credit through the end of April. In addition to the expanded credit for first time homebuyers, a reduced credit of $6500 would be available to home buyers who have been in their current residence for a consecutive five-year period in the past eight years.

Income limits under the new bill would be increased to $125,000 for singles and $250,000 for couples, from the current $75,000 and $150,000. The credit phases out for people making more than those amounts.

Does that cover everybody? Does everyone get a tax credit now? Cause we wouldn’t want to be handing out that free money and leave someone out.

And the National Association of Realtors? They’re sleeping well? Good.

But just to make sure it passes, the bill is reportedly being tacked on to a measure that would extend unemployment benefits. Of course. Because nobody would vote against the jobless.

Sheesh.

{ 15 comments… read them below or add one }

1 ComeToMeToGetYourHandout October 29, 2009 at 4:11 pm

No, it DOES NOT catch everybody.

Upon a cursory reading of the plans to extent the homebuyer tax credit, I want to say CONGRATULATIONS to the government on finding a way to once again avoid giving me a tax break/rebate while give free money to almost everyone else.

I don’t qualify as a first-time homebuyer, because I owned within the last three years.

I also don’t qualify as a current homeowner, because I don’t own! (And, I’m just a few billable hours from being ineligible under the single income limit.)

Gee thanks. I didn’t qualify for any of the bailouts, rebate checks, unemployment extensions, marriage “penalty” adjustments, bank bailouts, auto bailouts, fuel/food assistance increases, or any of the other giveaways I’ve been paying for in the last 10 years, either. So congrats to the government on the admirable perfect record so far.

I also have paid in about the most of anyone into soc sec, in straight dollars and as a percent of income, I’m one of the oldest workers to have the maximum retirement age of 67 imposed, and I’ll be one of the first people told to “go away” once soc sec goes bankrupt.

Also, because I’m a saver and not a debtor, I’ll be the one funding all this when I lose all my wealth when the dollar disappears and the only way to pay for food is with food stamps. Do you think they’ll let me exchange my GLD shares for food stamps? (BTW, they don’t even allow GLD to take advantage of the capital gains tax reduction, so I got screwed there too.)

I guess I’m supposed to either become a tax cheat or a gun-totin’ tea baggger. Or be a defense contractor and live off the war-for-profit teat. The incentives are all there. Or turn over a new leaf and be a lazy, spoiled-brat, one-job-loss-or-illness-away-from-bankruptcy debtor.

2 laurie ruettimann October 30, 2009 at 12:00 am

Two women from Mexico pooled their resources, have cash for a down payment, and used the first time taxpayer credit to buy my grandmother’s dilapidated house. Everyone wins.

- Gramma owned that house for 50 years. It was her first & only house in a working class neighborhood in Chicago.
- Now someone else — two older women who have worked hard for years — own it. No more rental payments. They’ll have equity.
- Three women (Gramma, buyers) achieve the American dream.
- Gramma goes into a nicer assisted living facility — not the one you always see on 60 Minutes.

I dunno. The program isn’t perfect and people are jerks, but it helps to make three lives easier in Albany Park on the NW Side of Chicago. None of these women are skeevy tax cheats or liars. They’re all just trying to improve their lives — and in my grandmother’s case, enter the final stages of her life with a little more dignity.

3 JBruce October 30, 2009 at 2:12 am

I said it before, and I’ll say it again. Assuming this thing passes, the homebuyer tax credit is here to stay. Come April it will be impossible to let it die; the most one can hope for is that when the economy is back to normal (if ever), Congress may phase it out — veeerrryyy slowly. Like, every 6 months to a year it goes down by $1,000.
I , too, am caught in the “Not for you!” My wife and I own a home that we bought in 1979. We’re getting a divorce. I moved into an apartment in December, 2008. Although I lived in that house for 29 consecutive years, including SIX of the past eight years, I don’t qualify because it’s not my “current” residence. My wife would qualify, because she’s still living there. Furthermore, since I still own the house, I can’t anticipate qualifying as a first-time buyer anytime soon.
The “some people have abused the program” argument it totally empty. Various “somebodies” out there are abusing almost everything. Retailers routinely plan for a goodly percentage of inventory “shrinkage” (shoplifting and employee theft). I’ll bet there’s just as much (or more) fraudulent claim activity on healthy insurance companies as there is on Medicare. People in every neighborhood steal cable. Millions borrow money and don’t pay it back. Wall Street stole over a trillion dollars from its customers in the past two years. Fraud is rampant, and most of it stays totally within the private sector. If every program, business or industry that has been financially “abused” was shut down there would be no economy left at all.

4 JBruce October 30, 2009 at 2:13 am

Make that December 2007 that I moved out.

5 Jill October 30, 2009 at 11:13 am

Well it’s just ducky that they’re extending this credit to first time homebuyers….but what are they doing for those of us on the other end of the deal? People like me, whose property value dropped significantly since the economy tanked. If I tried to sell my home today, I’d have to sell for at lease $28,000 less than I paid for it. (And plenty of people are worse off than me in that regard). So goodie for the homebuyers that they get help buying – but what about people like me that would get screwed on the selling end? Thanks for nothing, Uncle Sam!

6 Ron Hassett October 31, 2009 at 10:31 am

This needs to end now! There will always be dishonest people available to take advantage of “free” money but regardless of this and past justifications of the first time homeowner credit, further artificial stimulation of the economy will hurt the taxpayer, add additional burden to government debt and add to the instability of the world markets.

7 BS November 1, 2009 at 12:34 pm

First of all if you bought a few years ago stop bitching clearly not everyone will benefit from these handouts.Live in your homes and pay your mortagages enjoy what you wanted in the first place which is a home!Look at it like a car when you drive it off the lot it loses value.Its like the stock market it goes up and it goes down. On the other hand offering 6,500 for people who bought their homes over five years ago is just stupid.It looks like congress doesnt have the balls to increase the 8,000 to more for the real first time home buyers that have never ever bought a home.I dont mind the home prices dropping dramtically mostly because i dont own a home yet but where i live the area is really nice and safe but behind closed doors lerks horrible homes that have been let go to the point that they should be bulldozed down or at least gutted.To think that a few years ago these shit heaps were priced at 260,000 is a joke they are now priced at like 60,000-170,000 still they are lemons that only investors can take on. Im trying to buy my first home at 28 years old it is the only home that is worth more than the price asked.I made an offer on a shortsale in July and the bank is just now reviewing my offer of 162,000.This home is in really great condition yet it still has a completely unfinished basement,no appliances,two 70s bathrooms that need updating,needs a fence… at some point new cabinets….ect. So even though I saved 20% down like 32,000 dollars plus closing costs I still need that 8,000 first time homebuyers rebate.I will never hear from the bank in time to close by November 30th So I think they should extend and increase the first time homebuyers rebate.I dont think people who make any where near 100,000 should get any help from the government.If I made 100,000 a year I would feel rich and I would feel greedy taking a handout from the government!Like they need 8,000 if they think they need 8,000 then they arent living within their means which is pathetic to me. I make around 30,000 a year peanuts compared to them and I have a credit score of 780.I also paid off my 14,000 dollar car loan within a few years.So if I can do all of that then I dont see why someone making 100,000 or more needs a handout.Not to mention the home Im waiting to hear on is 4,065 a year in taxes which to me is really high on a home valued at 159,900.4,065 is the amount that the taxes cost when this home was 260,000 2 years ago.Now that I think about it its messed up that home values have dropped almost in half and taxes havents dropped at all.So maybe the government should give every homeowner a huge break on the home tax they are paying since they cant seem to send out someone to reasses taxes . I truely believe that the people who intentionally defrauded the IRS by filing for this credit should be put in prison FINED and have a lien put on their homes.If that guy Richard Hatch from Survivor was sent to prison for not paying taxes on a game Prize he won of 100,000,000 then why arent these people being rounded up and sent to prision?Isnt it worse to scamm the IRS in this situation then the other.The parents that used their four yearolds,underage kids to claim this 8,000 should be looked at for child abuse or endangerment or at the very least Identity fraud.Wasnt Al Capone put away in prison for life on one count of tax evasion?..They couldnt put him in jail for being a gangsta Murderer.. but The IRS managed to get him locked up for tax evasion.

8 JBruce November 1, 2009 at 3:24 pm

To BS: Since they’re going to extend the tax credit, I’m pleased to hear that, for one person at least, it will be a great benefit.

As for your property taxes — yes, yours are quite high, especially copmpared to where I live (my taxes are $1400 a year on a home with assessed value of $141,000). However, since your taxes were assessed when your home was worth close to $100,000 more than it is now, there should be some mechanism whereby you can appeal the tax amount and get the taxes reduced. Property taxes, by law, are based strictly upon value, so your taxes ought to reflect the home’s current, lower value.

9 Stephanie November 4, 2009 at 5:26 pm

I applied for the $8,000.00 tax credit and was denied because I lived in mobile home for the past 3 years. I really didn’t think a mobile home would qualify for an actual home since you don’t pay real estate taxes on a mobile home. Will I qualify for this $6,500.00 credit?

10 OhMan November 10, 2009 at 5:53 am

I bought my house May 8th and submitted for the first time home buyers credit on my 2008 taxes on May 12th. I still haven’t recieved any money. My file went through exams and they approved the return on Aug 31st. It has been a total of 180 days. Here is my message to the President: Mr. Obama, The reason this economy isn’t doing better is because the people responsible for handling your incentives are slackers or just plain stupid. DO NOT COUNT ON THIS MONEY FOR ANYTHING IMPORTANT!

11 James November 10, 2009 at 11:14 am

After reading summaries, I finally found the text of the bill (H.R. 3548). What I’m interested in is whether my family qualifies for the $6,500 credit since we sold the house we had lived in for 10 years in September of 2008 and bought a home in Feb of 2009. Here’s the important text:

H.R. 3548
(6) EXCEPTION FOR LONG-TIME RESIDENTS OF SAME PRINCIPAL RESIDENCE- In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.

As I read it, since we lived in our first house for 7.5 years out of the 8 prior to purchasing the second, we qualify. My wife and I don’t make anywhere near the old $150,000 or the new $225,000 income limit. I think this expansion was written with my family in mind, and I appreciate it. I’ve always tried to live within my means, and I have done my part to help spur the economy during this crisis. The only stupid thing is that they should have written it this way to start so that more people would have been given incentive to buy homes.

While it would suck to not qualify because you bought your last home in 2004, it actually makes sense to me to not reward the behavior of buying a different home with a frequency of under 5 years. My wife and I stuck it out in our first home for nearly 11 years with our growing family while everyone around us was upgrading constantly – riding and contributing to the ridiculous rise in home prices. I was conservative with my money when conservative wasn’t cool, and spent it when the economy needed it; so you’ll forgive me if I’m not too embarrassed about taking the $6,500.

12 Jim June 22, 2010 at 7:19 pm

My spouse and I were denied the $6,500 credit. We sold and bought a house on December 5, 2009. I was not co-owner on the sold house, even though I lived in the house with my wife (who did own it) since 2003. Because I was married to a home owner, I was not eligible for the $8,000 credit. OK, that’s reasonable.

But because she was married to a non-owner, she is not eligible for the $6,500 credit. IRS website confirms this. See credit Q & A.

So let me get this straight. If we didn’t get married, she could have claimed the $6,500 credit if she bought the new house. And if we didn’t get married, the I could have claimed the $8,000 credit if I bought the new house. But because we were married, we can’t claim either credit. There are provisions for unmarried couples jointly buying up. Makes absolutely no sense.

13 James June 23, 2010 at 11:02 am

Just a follow-up. I did get the $6,500 tax credit. Seems like everyone posting here wants to prove that the credit is either an unnecessary handout or a tax illusion that you can’t qualify for. My first post was me pointing out that it is a fair tax break for those of us who didn’t sell when selling was popular and bought when the economy was down. This post is to point out that applying for and receiving the credit was straightforward, easy, and made sense to me.

14 Jim June 24, 2010 at 9:51 pm

Just a follow up. Actually, it is not illusionary, to those who were denied the credit. As one blogger pointed out, they “finally found the text of the bill”, which I finally found too. It is difficult to find the text of any bill. And it was not as clear cut as the legislators, realtors, and IRS had trumpeted in their promotion of the expanded credit.

They say the devil is in the details, but many people “bought up” thinking that they were entitled to the credit, only to find out that an arbitrary provision, that when loosely interpreted by the IRS would disqualify them, simply because they.

Clearly the provisions surrounding married taxpayers, who didn’t co-own the house, are anti-marriage and anti-family. That is unless your definition of marriage and family requires strict adherence to co-ownership of all assets.

15 Ken Keeton October 2, 2010 at 12:17 am

We just got denied the 8000 credit. I bought a mobile home in 1997 and lived in it since then except for two of those years. Because I got married three years ago and my wife moved in… now I don’t qualify for the credit. This is total B.S. as far as I’m concerned. I hope whoever made that rule gets cancer and dies a slow agonizing death but not before seeing everything they love parish. Canceled vacations, penny pinching and living on a strict budget all because some smarty pants hates married people. I only wish I knew who it was… would love to spend some quality time with that person.

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