Buying a Home? You Might End Up With a $15,000 Tax Credit

In a move designed to revitalize the stagnant housing market, the Senate has voted to approve a measure that would provide a tax credit of up to 10% of the value of new or existing homes, with a cap of $15,000. The current law in place provides a $7,500 tax credit, but only to first time home buyers.

According to Alan Zibel, writing for the Associated Press, the credit would work as follows: People who buy a home would have 10 percent of the purchase price applied to their tax bill. What about people who owe less than that in taxes? The credit would allow home buyers to spread the tax credit out over a two year period.

Anyone who buys a home during the year would qualify. To prevent speculators from taking advantage, the law would require buyers to live in the home as their primary residence for a two-year period.

I’m currently in the market for my first home, so this sounds like great news to my ears.

Diana Olick, of CNBC, notes that the tax credit would be helpful, but certainly not a silver bullet to fix the ailing housing market.

“The tax credit, while available to all buyers, is really only going to help a first-time home buyer who has good credit and money to put down on a 30-year fixed. It won’t overcome the hurdles facing the bulk of potential buyers out there who either have to sell their current home or don’t have the good credit and downpayment necessary to take advantage of today’s low mortgage rates.

In other words, the tax credit is a good start, but let’s hope it’s not the finish.”