Free money from the government? (did that sound like an infomercial to everyone?…if you were wondering, I am not wearing a suit with numbers and question marks all over it.)
In Part 2 of the Housing Bill series, we are going to get everyone up to speed on the First Time Home Buyer Tax Credit. (Which is not just for first time home buyers, nor is it really a tax credit.)
First, let’s set the record straight, this is not free money from the government. Let’s look at who and how much.
Who – Anyone who has 1) not owned a primary residence in the last 3 years (not only first time home buyers), 2) who makes less than $75,000 year as a single filer or $150,000 year as a joint filer, and 3) buys a primary residence between April 8, 2008 and July 1, 2009.
How Much – 10% of the purchase price of the property up to $7500.
So, now that we know who and how much let’s undress the “tax credit” a bit shall we. This “credit” needs to be paid back starting the second year of home ownership through the tax return at $500 per year (that number has some assumptions, but 95% of the people who get the tax credit will pay $500 per year). Yeah…not really a tax credit huh, more like an interest free loan. The beauty of this is the extra incentive for people who qualify to enter the housing market. The marketability of this incentive will pull people from the rental market and drop them into the buying market. As professionals, we need to make sure they understand it while we reap the rewards of the increasing buyer pool.
That’s all for now. I’ll be back soon to you all with a reason why vacation home owners and investment property owners may want to consider upgrading!
--Keith
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