Now that the shouting is over and the new Stimulus law has been passed, I think many of us are wondering what it all means. As REALTORs I think it's very likely that we will receive many benefits from legislation that is at least partially concerned with improving the housing market.
Just being knowledgeable and knowing where to send our friends and clients to look is often the best approach. Real estate 101 tells us that we are not tax experts and we always give the caveat to not rely on us for tax advice, but it's always nice to have a source for them to go to for their own information.
Below, you will find a link that I think is a good source of those basic parts of the Stimulus plan. There are a lot of moving parts in this program and I think one for us to be sure to mention is the First Time Home Buyer program.
The first-time Home buyer credit for eligible buyer is a tax credit equal to up 10 percent of the purchase price but can not exceed $8,000. The time frame of the purchase needs to have occurred between January 1st, 2009 and December 31st, 2009. I can already see the closings that have to get closed between Christmas and New Years next year or the client loses an $8,000 tax credit!
This should not be confused with last years which required repayment over 15 years. This one doesn't require repayment and that's a big change. One must give and take though. This one does phase out for individuals with incomes over $75,000 or for married couples with incomes of over $150,000 who file their taxes jointly. There is also a forfeiture of the credit if you sell the house within 3 years.
Now, as I write this, I get to call a client of mine who is scheduled to close and tell him that I think he may be entitled to an $8,000 tax credit without repayment. I will of course tell him to check with his tax consultant, but I can certainly put him on the trail. These are the types of things that give me sheer joy in the business. Mortgage Certificates, tax credits, tax deferred exchanges... I love being able to make people aware of savings that they might not have been aware of. It is my favorite definition of value added services.
Here's the link to the New York Times article,http://www.nytimes.com/2009/02/13/your-money/13money.html?_r=1
I hope you get to make some "good news" calls!
Did I mention that I am not a tax consultant, I do not play one on TV and you should not rely on any of the above as any form of tax advice and should of course seek the assistance of a tax professional!