LATIMES LINKFirst-time home-buyer credit. If you buy a personal residence between April 9, 2008, and June 30, 2009, you may qualify for a credit of up to $7,500. Credits reduce your tax on a dollar-for-dollar basis, unlike deductions, which simply reduce your taxable income. However, this credit must be paid back over time. It's essentially a 15-year interest-free loan aimed at making home purchases more affordable.
The catches: It's not available for those who are simply trading up or buying a vacation or rental property. You can't have owned another home within three years of the qualifying purchase. It also phases out for single filers who earn more than $95,000 and married couples filing jointly who earn more than $170,000.
In addition, there's a new standard deduction of up to $500 for singles and $1,000 for married couples for those who pay real estate taxes.
Someone on CNBC today suggested a tax credit of up to $20K for anyone who buys an existing home, not just first time home buyers.
New construction would not qualify for obvious reasons since we already have too much inventory.
But that would get my attention.
It might be on a percentage of value, since no doubt somebody would buy a shack for $5K and pocket the rest.
Anyway, there are always unintended consequences and loop holes which could be abused.
But it seems to me that it might encourage folks to start looking to upgrade.
And I would love a 3 car garage.
Edited by Rogerdodger, 10 January 2009 - 12:24 AM.
