About $7.3 billion in interest-free loans was obtained under the first credit, while $16.2 billion in tax credits that don’t have to be paid back has been claimed under the second and third credits.
Without the home buyer tax credits put into place by Congress to boost the struggling housing market, prices would be 10% lower than they are now, according to an analysis by a Mississippi-based information technology firm. But at what price?
The Joint Committee on Taxation estimates that the three credits could result in total revenue losses to Uncle Sam of about $22 billion through 2019.
About 1 million buyers claimed $7.3 billion in interest-free loans under the first credit. And they will begin repaying the government next year, according to the Government Accountability Office.
But about 2.3 million people claimed $16.2 billion in tax credits that don’t have to be paid back under the second and third credits. And those figures are likely to increase because the Internal Revenue Service is still processing returns and more claims will be made during the 2011 tax-filing season.
The second version of the home-buyer tax credit was the most frequently used, accounting for some 1.7 million claims — about half of all claims to date — and totaling about $12.1 billion, the GAO reports.
The third version of the tax credit was aimed at move-up buyers as well as first-timers who were the targets under the first two. And of the 600,000 who have claimed that credit, nearly one-third are so-called longtime owners.
Buyers in California were the most active. More than 378,000 people in the country’s most populous state have claimed the credits, amounting to almost $2.8 billion.
Texans were next in line at the IRS’ tax-credit window, followed by Floridians. Almost 290,000 buyers in the Lone Star State have claimed $2.07 billion in credits as of July 3, and nearly 214,000 buyers in Florida have claimed more than $1.5 billion worth.
And let’s not forget the 14,132 individuals who, according to the Treasury Department’s inspector general’s office, filed erroneous or fraudulent claims.
An audit by the office found, among other things, that 67 individuals used the same house number to claim the credit, 1,295 of the claimants were incarcerated at the time they supposedly bought houses and one “buyer” was just 4 years old.
And here’s a special shout out to the 87 IRS workers who claimed the credit despite the fact that they had owned houses within the previous three years, making them ineligible.