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The $8000 Tax Credit for first time home buyer’s (people who have not owned a home in the last 3 years) expires on November 30, 2009.    With the expiration date drawing near, the Realtor and builder lobby groups are pushing lawmakers to extend the program for another 6 months.   If they are successful, it will cost taxpayers of nearly $15 BILLION.  

“Yea” or “Nay”???    Before we cast our vote, we decided to find out whether the tax incentive successful or not?  Specifically, did it persuade people to jump into the market?   Would it be a good investment for taxpayers going forward?

According to a poll conducted by Zillow, the tax credit was persuasive.

• 18 percent of home buyers said the tax credit was the main reason they pushed to buy a home before November 30, 2010.
• Based on the number of first time buyer’s in the marketplace, a 6 month extension could persuade another 335,000 (18 percent) buyers to buy a home of their own.
• If the first time buyer credit is extended, home sales would likely increase 5 percent.  Without it, sales would be down as much as 2 percent.
• Only 31 percent of first time buyers said the credit had no influence on their decision to purchase. 
• 69 percent of buyers said the tax credit was important in motivating them to buy a home this year.

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Home seller’s and real estate agent’s are waking up to the fact that nearly half of all buyer’s shopping for a home are first time home buyers. 

Sellers should realize the timely opportunities that are available to this group, and they should be aware of all the benefits today’s first time home buyer will receive, in order to successfully do business with them.

One unique opportunity that provides immediate benefits for home sellers and first time buyers is an $8000 tax credit incentive from the US government.   The purpose of the program is to encourage home sales and provide a much needed boost to the US economy.

Outline of the $8000 Tax Credit Program is as follows:

1. The Tax Credit is available for First Time Home Buyers Only.  (First Time Buyers are defined as anyone who has not owned real property in the past 3 years.)
2. The home must be used as the buyer’s primary residence.
3. The home must close January 1, 2009-December 1, 2009.
4. The buyer claims the $8000 on their tax returns, which greatly reduces their tax liability.
5. The $8000 does not need to be repaid, unless the buyer resells the home within 3 years of purchase.

The National Association of Realtors, who backed the plan, estimates that the tax credit will stimulate up to 300,000 home sales.  The NAR also feels that the bill will help stablize home values and could possibly help some distressed seller’s avoid foreclosure.

To read more about working with first time buyers, click here.

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The IRS is offering some much needed tax help in 2009.  The Tax Relief Programs, which address real estate matters are outlined below.

1. 1.  First Time Homebuyer Tax Credit:  People who recently bought a home or those who are considering buying one should pay close attention.  The program, which could be worth $7500 to those qualified, defines “first time buyer” as anyone who has not owned a primary residence in the past three years.   If this is you, check out the IRS program details.
2. Offers in Compromise on Home Values:  An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS.  An OIC is a viable option for taxpayers experiencing money difficulties, as the agreement settles a tax debt for less than the full amount owed.  Under IOC guidelines, the IRS realizes that real estate valuations may not be accurate.  In instances of financial hardship, where the accuracy of local real estate values are in question, the IRS will give a new review of the information before determining their final offer.
3. Real Estate Tax Deduction:  Taxpayers can claim an additional standard deduction, based on state and local real estate taxes paid in 2008.  The maximum deduction is $500 per person or $1000 for joint filers.
4. Workouts and Foreclosures:  For most homeowners, debt forgivenness is now tax free.  Homeowners can exclude forgiven debt on their principal residence if their loan was for owe less than $2,000,000.  The limit is $1 million for individuals and married couples filing separately.

Thank you for visiting InfoTube.net homes for sale or rent website. If you are interested in more information, consult your tax planner or visit www.irs.gov.

                                                                                                                                     The phrase “One man’s loss is another man’s gain”…is certainly true when it comes to real estate.  A number of factors have converged to make 2009 a great year for the first time home buyer. 

1. 1.  Interest rates are at their lowest levels in decades.  With Fixed rate mortgages hovering at or below 5 percent fixed for a 30 year loan, homeownership is within the grasp of many people that were priced out of the market.
2. Home Prices are down in all area’s of the country, and it is unlikely they have much further to fall.  This means that bottom fisher’s can lock in a great price on a home.
3. The FHA has a first time buyer program that requires only 3 percent down and is available to people with less than perfect credit.
4. Tax rebates and incentives.  First time buyers will receive a tax credit up to $7500 on the purchase of a home.

The weak housing market and economy have presented quite an opportunity for individuals who have never owned a home.  If you are a first time buyer, everything you need is in place to make the deal of a lifetime.

Thank you for visiting InfoTube.net.  Happy New Year and House Hunting!