November 12th, 2008
First-Time Homebuyer Tax Credit
One of the most exciting new provisions of the Housing and Economic Act of 2008 is the First-Time Homebuyer Tax Credit. The credit is designed to encourage first-time homebuyers to go ahead and make the leap to purchase their first home. Combine this tax credit with the fact that home prices are at historical lows, and indeed it is an ideal time for many first time homebuyers to purchase homes.
Here are some things to keep in mind:
The credit is available for home purchased between April 9, 2008 and July 1, 2009
The credit amounts to 10% of the purchase price of the home not to exceed $7,500
A first-time homebuyer is defined as someone who has not owned a home in the last three years
Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit
The tax credit works like an interest free loan and must be prepaid over a 15 year period.
How does the tax credit work? A tax credit is a special provision that reduces income tax liability on a dollar for dollar basis. When filing a tax return, you must include income items, deductions items and the number of exemptions, among other things, to figure your total tax liability. If your total tax liability ends up being $7,500, and you qualify for the full $7,500 tax credit, this credit would be applied and would wipe out all of the tax due. If your employer had already deducted the $7,500 from your pay checks throughout the year, you would receive a tax refund of $7,500.<\p>
Does the credit have to be repaid?
Yes, the credit does have to be repaid, so it is really more like an interest free loan. Homebuyers will be required to repay the credit to the government, without interest, over 15 years or when they sell the house. If there is sufficient capital gain from the sale. For example, a homebuyer claiming a $7,500 credit would repay the credit at $500 per year. The homeowner does not have to begin making repayments on the credit until two years after the credit is claimed. So if the tax credit is claimed on the 2008 tax return, a $500 payment is not due until the 2010 tax return is filed. If the homeowner sold the home, then the remaining credit amount would be due from the profit on the home sale, if there was insufficient profit, then the remaining credit payback would be forgiven.
Conclusion:
For more information about the first-time homebuyer tax credit or other changes resulting form the Housing and Economic Recovery Act of 2008, just give me a call/email
This was sent to me by Carma Van Houten. Sr. home loan consultant from our in house lender at JPMorgan Chase
Posted on November 12th, 2008 in Buyers, Contracts, General | Comments Off
November 5th, 2008
This summer I met and helped a wonderful family to purchase their fist home. When I met them they were in the beginning stages if the adoption process. Adopting a child is a very lengthy and is quite costly.
They found a home that will give them a permanent, safe place to raise a family. They now turn to our community to help them move forward in providing a home for a needy child.
There will be a benefit concert and silent auction Featuring the Folk music of Randy and Jenny Jones. All proceeds and donations will go to the Spence Family. Donations can still be received after the concert.
Concert will be November 8th
at 7pm
2304 Zanker Road
San Jose, CA 95131
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Adoption is greater than the universe….it was there before the universe, it is above the universe, and it is the purpose of the universe…- John Piper
Posted on November 5th, 2008 in Buyers, Condo Conversions, Contracts, Downtown Living, Downtown San Jose Condos, General, Uncategorized | No Comments »
