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Homebuyer Tax Credit Comparison


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FEATURE

CURRENT LAW

HOUSE VERSION

H.R. 1

SENATE VERSION

(Isakson-Lieberman Amendment)

Amount of Credit

Lesser of 10 percent of cost of home or $7500

Same as current law

Lesser of 10 percent of cost of home or $15,000, but only for purchases beginning the date the President signs bill. 

Eligible Property

Any single family residence (including condos, co-ops, townhouses) that will be used as a principal residence

Same as current law

Same as current law

 

Refundable

Yes.  Reduces (or can eliminate) income tax liability for the year of purchase.  Any unused amount of tax credit refunded to purchaser.

Same as current law

No.  The credit can reduce tax liability to zero, but if purchaser’s tax liability is less than the amount of the credit, the unused portion is not refunded to purchaser. 

Income Limit

Yes.  Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return).  Phases out above those caps ($95,000 and $170,000, respectively).

Same as current law

None. 

 

 

First-time Homebuyer Only

Yes.  Purchaser (and purchaser’s spouse) may not have owned a principal residence in 3 years previous to purchase

Same as current law

No.  All purchasers, not just first-time homebuyers, are eligible for credit.

Recapture/Repayment

Yes.  Portion (6.67% of credit) to be repaid each year for 15 years, starting with 2010 tax filing. If home sold before 15 years, then remainder of repayment amount recaptured on sale.

Yes and No.  Repayment will apply to 2008 purchases.

For 2009 purchases, the credit will not be repayable UNLESS the home is sold within three years of purchase. 

Yes and No.  For 2009 purchases, the credit will not be repayable UNLESS the home is sold within two years of purchase.  Repayment will continue to apply to all 2008 purchases and 2009 purchases before date of enactment.

Effective Date

Purchases on or after April 9, 2008.  Repayment to begin for 2010 tax year (return filed in 2011.)

Repayment elimination applies only to 2009 purchases

$15,000 amount and repayment feature effective as of date of enactment (date of President’s signature).

Termination

July 1, 2009

July 1, 2009

September 1, 2009

Interaction with Alternative Minimum Tax (AMT)

Can be used against AMT, so credit will not throw individual into AMT.

Same as current law

Same as current law

Allocation Election

(Utilizing the credit over 2 years rather than only in the year of purchase)

No provision

No provision

A purchaser can make an election to take the credit over 2 years.  If the purchaser makes this election, the amount claimed must be the same in both years.

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