Final Decision…$8,000 Tax Credit for Homebuyers
After hard fought negotiations for the last several weeks, President Barack Obama signed off on the stimulus package to become law yesterday in Denver, Colorado. The bill is directed at our struggling economy and mainly focused on the creation of new jobs, enabling consumers to have money to spend and an infusion into our country's infrastructure.
With regards to real estate, how is this going to effect buyers here in the Santa Barbara CA area?
First-time buyers are now able to claim a credit worth upwards of $8,000 - or 10% of the home's value, whichever is less - on their 2008 or 2009 taxes. One of the biggest issues that was fought by many was having the credit be refundable, meaning tax filers will be able to see a refund of the entire $8,000 even if their total tax bill ends up being less than that amount.
For an exact clarification of how this will effect you personally, I advise everyone to be in direct contact with his/her accountant. In the end, the refundable tax credit should benefit first time homebuyers a lot more than the original proposed version of the stimulus package. Although it is not the $15,000 that was fought for, hopefully $8,000 will be helpful to many.
To qualify for the credit, you as a buyer must purchase a home between Jan. 1, 2009 and Nov. 30, 2009. To qualify as a "first-time homebuyer", you may not have owned a home for the past three years. One catch that people need to be aware of is that you must also live in the house for at least three years. If not, then you apparently will be obligated to pay back the credit at sometime...again talk directly with your accountant on this.
With regards to income restrictions, single individuals must make less than $75,000 and couples less than $150,000. If your income is higher than either of these amounts, you will most likely qualify for a partial credit...again talk directly with your accountant on this.
If you have already filed your taxes for 2008, you can file amended returns to claim the credit.
So what are your thoughts on all of this...
It is only one day old, but most of what I am reading and hearing is sort of middle of the road reception. The plan does improve on the original $7,500 tax credit which in essence was more of a loan for many than an actual credit. For many that sought the $15,000 proposal for ALL homebuyers, the bill is most likely a disappointment.
"[The Senate version] would have done a lot more to turn around the housing market," said Bernard Markstein, an economist and director of forecasting for the National Assoc. of Homebuilders For many here in the (NAHB). "We have a lot of reports of people who would be coming off the fence because of it."Santa Barbara area, this credit will only represent a discount in the price so to speak and not address the common huge hurdle of a down payment. For most residents here in the Santa Barbara CA. area, that is the biggest struggle when looking into home ownership. Not too many people (without some help) can come up with $100,000 to $200,000 cash just for a down payment. For those who are able to come up with this amount and purchase a home here in our area, the $8,000 can also be seen as a means to make some wanted repairs and upgrades to the home and thus help stimulate the economy in that way. For information in general on Santa Barbara Real Estate, Montecito Real Estate and/or our surrounding areas, as well as any other aspects of life in our area, please don’t hesitate to contact Kevin Schmidtchen at Sotheby’s International Realty. Further Reading:
- Is My Realtor a Santa Barbara Neighborhood Specialist?
- Santa Barbara Real Estate Market Statistics
- Santa Barbara Real Estate - General News
- Santa Barbara - The Oceanfront Areas
- Santa Barbara - Community Events
- Montecito Luxury Real Estate
- Montecito CA. - General Information
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