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Abstract
The Housing Assistance Tax Act of 2008, includes $15.1 billion in tax incentives that are fully offset by far-reaching revenue raisers. While the tax incentives are targeted principally to home ownership and affordable housing, the offsets are collected from a variety of sources. New provisions that require credit card purchase information reporting by merchants and close a home sale exclusion loophole for vacation and rental property are among the more prominent offsets that will require a shift in tax strategies. The first-time homebuyer credit is by far the biggest tax break in the new law, weighing in at an estimated cost of $4.8 billion over 10 years. However, that figure hides the credit's true immediate impact since new homeowners are predicted to take this credit to the tune of $1 3.6 billion in 2009. Unlike any other individual federal tax credit, taxpayers must repay the first-time homebuyer credit. They will have 15 years to repay the credit, interest free. Repayments start two years after the year in which the residence is purchased. Payments must be made in equal installments over those 15 years.