There was a bill passed in October 2008 that would provide a $7,500 tax credit which is applied to the 2008 tax return. The tax credit will be payed back in 15 years - interest free, that's $500 a year. That's a great deal for the first time home buyer or a buyer who has not owned a home for the last 5 years.
A lot of time, people outside of Washington read media coverage about stuff that goes on here, and it's confusing.
This week, there seems to be some confusion about the President's economic plan that is currently crawling through the legislative process in Congress.
Right now, as I write this, the $15,000 tax credit for home buyers is a mere proposal. If enacted, this would mean that buyers would basically get to deduct $15,000 from their federal income tax bill.
There are two versions of this bill and two versions of the tax credit.
The House of Representatives, where the legislation originated, had a $7,500 tax credit for first time buyers only (defined as people who haven't owned a house for the last few years), and there were income caps, so many first time buyers would get zilch. Nada.
The Senate version is far more generous, doubling the amount, losing the income caps, and giving it to all buyers - not just first timers. It will also cost a whole lot more than the House version.
After the Senate passes its plan, representatives of each house of Congress get together to reconcile the differences. Then the final version goes back for another vote, and assuming the compromise bill passes, it will go to the White House for President Obama's signature.
Then, if the tax credit makes it through, we unpop the champagne and really, really celebrate!
Oh, and this might be a great time to contact your favorite Senators and Congressman (or woman).
