Key Highlights
- Biden proposed $15,000 tax credit to help first time buyers buy a house
- For such a policy to become reality, Congress would have to pass such a bill
As part of his $640B housing plan outlined in February, the Democratic presidential nominee, former Vice President Joe Biden, has proposed a first-time homebuyer tax credit of up to $15,000. This first-time homebuyer tax credit could be used at the time of the home purchase.
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In many ways, this $15,000 tax credit for first time homebuyers is similar to the tax credit of $7,500 created by the Housing and Economic Recovery Act at the time of the Great Recession originally signed by President George W. Bush in July 2008. When President Barack Obama came onboard, he upped the tax credit program to $8,000. Both of these tax credit programs expired in 2010.
Biden’s proposed program language specifies the tax credit as “up to” $15,000. The Bush and Obama programs gave a tax credit equal to 10% of the home’s purchase price, capped at either $7,500 or $8,000, depending upon when the first-time buyer bought the home. Also, in both the Bush and Obama programs, the homebuyer would “redeem” the tax credit when the buyer filed their income taxes the following year. Biden’s plan would create the tax credit to be used at the time of the home purchase.
In support of this Biden proposal, Greg McBride, chief financial analyst with Bankrate.com, said, “There are thousands of dollars in savings that people have to come up with to get into their first home. This (tax credit proposal) could help jumpstart this, and put (first-time buyers) on much more stable ground as new homeowners…”
Lawrence Yun, chief economist with the National Association of REALTORS®, also gave a thumbs-up to this policy proposal. “We don’t know all the details, but we welcome any policy from either the Biden or the Trump campaigns that shows the importance of housing to the economy, and helps first-time buyers,”
At this point in time, the Trump campaign has not put forth any housing proposals.
Thanks to HousingWire and the Biden campaign.
Also read: Credit Availability More Available in November 2019, Sanders’ “Housing For All” Plan Would “Screw” iBuyers, Where Are People Moving From & To?
