Tax Credit Bust 25

first time homeowner tax creditHow much would yet expect the home buyer program would cost the government? If you had to put a number on it, do you think you could?

Well, some estimates are making their way around the internet now. One estimate from the Government Accountability Office pegs it at $22 billion.

Now, the way the original tax credit worked, back in 2008, allowed homeowners a tax break of $7,500. This needs to be paid back over 15 years beginning in 2011. So far $7.3 billion has been claimed.

The 2009 Recovery and Reinvestment Act expanded it to $8,000 which didn’t need to be repaid (assuming they stay in the home for 3 years). So far, that’s cost $12.1 billion.

Then over the summer the filing extension gave people another window the claim the credit. That added another $4.1 billion.

And nationwide it was California that claimed the most out of any state. But Nevada has the most claimed per resident, though both states have been pretty hard hit.

So this is the information Washington is going to have to consider when deciding whether to bring back the tax credit. It’ll be interesting to see which way they swing.

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