How exactly will the $15K tax credit in the newly passed stimulus bill benefit home buyers?

Question

Is it simply a check for $15,000 that may used at the receiver's discretion, assuming s/he qualifies? And if it doesn't have to be repaid, isn't it simply free money? And is this a good policy?

Answer 1

IT's not law...it's merely proposed.

For the last time: there is absolutely no such thing as free. Stop thinking that there is such a thing.

Answer 2

Tax CREDIT  that is used to offset the federal taxes you owe.  If your tax bill for the years is 3k then your credit is for 3k.  Read the fine print

Answer 3

Most likely, there is a time frame attached with this money so if you sell before say ten years you would have to pay some of this money back.  I don't think that all of the details are fully done yet, but is will be only used to buy a new home and not a check to use as you would like.

Answer 4

There is a huge misconception about this 15k vs. 7500k tax credit. The 15k (which is the maximum, it's actuallu 10% of your home cost) tax credit is  NON REFUNDABLE TAX CREDIT. Meaning, unless you and/or your spouse makes enough money to incur 15k in money you owe in taxes each year, the credit will help lower your tax liability to maybe 0. HOWEVER, if you don't owe enough in taxes, than you won't get a REFUND OR CHECK with the remaining money. The 7500 tax credit, is refundable, so in our case, we bought a home and didn't owe taxes so we recieved a check for the whole 7500. Which we have to pay it back, but its intrest free! You would need to purchase a home before this law passes, because it will sunset the current 7500.00 tax credit, meaning going forward it will be the only home tax credit you can choose from, whether it benefits your or not.

Hope this helps a bit!!