Stimulus still a shot in the arm for First timers

Stimulus bill includes boosts for housing. The American Recovery and Reinvestment Act of 2009 (H.R. 1) increases the first-time homebuyer tax credit to $8,000 and eliminates the repayment requirement for buyers who purchase a home between Jan. 1, 2009 and Dec. 1, 2009 (See how the tax credit works). Other housing measures in the bill include:

• FHA, Fannie and Freddie loan limits - Higher 2008 limits will be reinstated for 2009, except in communities where the 2009 limit is already higher. (Link to NAR estimates.)
• Foreclosure mitigation and neighborhood stabilization – Funding will be given to states and municipalities that are recipients of Community Development Block Grant dollars to stabilize neighborhoods and redevelop abandoned and foreclosed homes.

For more information on this and what this means to you and your investments, contact us today at kjpremier@atproperties.com.

Source IAR

$15,000 Housing Stimulus Package Still in Jeopardy

 

http://www.cnbc.com//id/15840232?video=1028931562&play=1

 

At this time there is not a lot of detail provided about the bill.  There is a firm commitment to housing and KJ Premier will blog later to update you on any breaking news about the stimulus bill.

Home Buyer Tax Credit Still in Jeopardy

The Senate just passed the Economic Stimulus bill; it includes the $15,000 tax credit provision.   However, we face an uphill battle to keep it in the final package.  A conference committee has been convened so House and Senate members can negotiate a compromise between the House and Senate versions of the bill.  They expect to complete that process by this weekend. 

There is a strong push to eliminate or drastically scale back the home buyer tax credit.  Several newspapers have editorialized against it and a number of interest groups have voiced their opposition.

If you have not yet called your House and Senate members – NOW is your last chance!  If you have responded before, please do so again – do not assume they remember your calls or emails.  Please call and keep calling until you get a hold of someone.

Explain the urgent need for a meaningful homebuyer tax credit.  What does that mean?

• It must be substantial – the $7,500 House version isn’t enough; it must be closer to the Senate’s $15,000 level to be effective.
• It must be refundable to the tax payer – it should not be limited to an offset of taxes due.  The full credit should be available to the taxpayer as a tax refund; this will make it meaningful to buyers at lower income levels with lower federal tax liability.
• It should not be limited to first time buyers – first time buyers are a small percentage of the overall marketplace, if we are going to fix housing the entire housing market must be included.

Please do everything you can to get a commitment from your elected officials that they will support a strong housing credit which meets these criteria.

Here are a few things you can do:

• Click here to send a letter.
• You can also call your Senators’ offices. Click here for a directory of Senate phone numbers.

It’s now or never;  let’s make our voices heard.

Calling all First Time Buyers…”$7500 Tax Credit”

One of the big pieces of the housing rescue bill, passed and signed into law in July, was a $7,500 “tax credit” for first time home buyers.  We are blogging and keeping our eye on this bill because as it stands now those who take advantage of the “tax credit” have to pay the money back but, there is a chance that congress will vote to amend the stimulus package so that  the  recipients will not have to pay the money back.

First Time Homebuyer Tax Credit Qulifications:

• The home must be purchased as a primary residence.
• You must not have owned a primary residence in the last three years. For couples, both individuals must not have owned a primary residence in the last three years. Vacation homes and rental properties don’t affect this.
• Must not be a non-resident alien as defined by the IRS in Publication 519.
• Individuals must have a modified adjusted gross income of less than $75,000 annually and couples MAGI of less than $150,000 to qualify for the full amount.
• The phaseout range begins at $75,000 and ends at $95,000 for individuals, $150,000 and $170,000 respectively for couples.
• The home must be closed between April 9th, 2008 and July 1st, 2009.
• No mention of a credit score or history requirement

How the “tax credit” works:

• The tax credit is 10% of the home’s sale price with a maximum of $7500.
• You can claim the credit on taxes filed in 2008 or 2009.
• It’s a credit and not a deduction (difference between tax credit and tax deduction).
• “Tax credit” is a misnomer because it’s really a zero percent loan with some qualifications.

Tax Credit Loan Repayment Terms

The tax credit isn’t really a tax credit, it’s really just a tax free loan with some qualifications. You have to start paying back this loan within two years and you make equal payments over 15 years. When you sell your home, any profits will go first into paying off that loan. If you sell at a loss, the difference will be forgiven… meaning you will not owe any money on the loan (though it should be recorded as income as is typical with most loan forgiveness agreements, so you will owe taxes on it).money-picture

Keep checking back with KJ Premier…we are sure to keep you updated!  If congress passes the changes to the “tax credit” you can bet we will be yelling it from the roof tops!  A “good deal” would turn into a “GREAT deal.”