FIRST TIME HOMEBUYERS TAX CREDIT UPDATE!

By
Real Estate Agent with Everstar Realty Managing Broker 25190

Good Morning Everyone!

Despite all the news we have all heard on the news or read in the newspaper or seen on-line. Here are some facts that have come from the National Home Builders Association on the First Time Homebuyers Tax Credit.

There are several provisions in the overall stimulus package that will be beneficial for many of our members - and help stimulate demand for housing.

 Chief among these is an $8,000 home buyer tax credit for new home buyers. While we are disappointed and would have preferred a more enhanced tax credit like the Senate version, the conferees did retain some key elements from the Senate and made other modifications that are beneficial to home buyers and home builders. For qualified home purchases in 2009, the legislation:

 ·         Stipulates that the $8,000 tax credit does not have to be repaid, unlike the tax credit passed last summer;

·         Keeps the tax credit refundable, or claimable regardless of tax liability;

·         Extends the sunset date from July 1, 2009 until Dec. 1, 2009 so that consumers can utilize it during the critical summer and fall buying months;

·         Allows tax credit home buyers to participate in the mortgage revenue bond program; and

·         Permits state housing finance agencies to help buyers at closing by advancing the credit amount as a loan using tax-exempt bond proceeds.

 While much of the industry's focus was on the home buyer tax credit, there are several other important components in the legislation that will help small businesses and bolster the housing market.  H.R. 1, the American Recovery and Reinvestment Act of 2009, will:

 ·         Help home borrowers in high-cost markets by extending the 2008 FHA, Fannie Mae and Freddie Mac loan limits of $729,750 through the end of this year;

·         Temporarily allow exchange of Low-Income Housing Tax Credit allocating authority for tax-exempt grants and appropriates $2 billion in HOME funding for affordable housing projects;

·         Provide up to a 10-year deferral of tax due to business debt restructuring;

·         Expand the net operating loss carry back period from two years to five years for small businesses (businesses with average gross receipts of no more than $15 million over the prior 3 years) for losses arising in tax year 2008;

·         Extend  the 25C existing home remodeler credit through the end of 2010, increase the credit rate from 10 percent to 30 percent, raise the lifetime cap from $500 to $1,500, and expand the set of qualifying property;

·         Provide an Alternative Minimum Tax patch for tax year 2009;

·         Increase bonus depreciation and Section 179 small business expensing for business investment in 2009;

·         Increase New Markets Tax Credit allocating authority for 2008 and 2009; and

·         Delay for one year the start of the 3 percent government contractor withholding requirement (from 2011 to 2012).

This all looks very promising and I think that once we have buyer confidence back in our marketplace things will turn around.

The incentive is there. Buyers! If you are looking to buy now is not a bad time. Interest rates continue to stay low, inventory is good and Tri-Cities has a GREAT outlook for new jobs! Hope to see you soon!

Let it rain!

Bear

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