TWO KEY HOME BUYER AND SELLER BENEFITS IN THE STIMULUS PACKAGE

The many, many future home buyers in Northern Virginia who have been delaying their home buying activity will want to know the key implications for buyers (and home owners) in the impending  $789 billion stimulus package. 

There are at least two important provisions they need to know.  And, it looks like the clock starts ticking when the package is enacted.  I am referring to the clock that will provide just so much time before these two benefits end.


The first provision is a benefit for home buyers, and it has gotten a fair amount of publicity.  It provides first-time home buyers an $8,000 tax credit provided they purchase a home between January 1, 2009 and August 31, 2009.   That's what it is looking like as of now.

This is a true tax credit.  By any measure, it is a serious advantage for potential home buyers. 

But just to help ensure that this provision is not abused or has other undesirable and unintended consequences,  the $8,000 credit is contingent on home buyers holding the property for at least 3 years.  Sell the home in fewer than 3 years and the tax credit must be repaid to the government.  Please note also that the date range applies to closings and not sales agreements.

In other words, closings must occur within these 8 months to be eligible.

Here is the second feature you should also know.  This one is for homeowners.  It is an incentive to "green" their homes.  With available tax credits for things like energy-efficient windows, doors, furnaces and insulation, homeowners can claim larger tax deductions based on home improvements.  It looks like the limit on this will be $1,500.

These are the basics as we understand them now.  But, remember that tax liability and tax issues can be highly situational and individual, so conceivably you could be ineligible for any number of reasons.  But hopefully it will work for you, if the timing fits your goals.  Just make sure to discuss your situation with a qualified accountant before committing to a plan.

By the way. if you are a home buyer. we put together a video on the buying process that you may find helpful.  Just go to our VIDEO CENTER and then scroll down to "How To Buy Your First or Next Home."