The Government Tax Credit looks like it’s going to be extended from $7,500 up to $15,000. Oh, and this isn’t just for first time home buyers. This is for EVERY home buyer. Find out what this can mean for your family in 2009.
This may sound familiar as the $15,000 credit was first proposed by Senator Johnny Isakson, a former real estate broker in March of last year. This tax credit would apply to any buyer purchasing a home as a primary residence for a year after the law is passed. Second or vacation homes are excluded.
Tax Deduction = Good Tax Credit = BETTER
‘Tax credits’ are not to be confused with ‘tax deductions’. A credit is a dollar for dollar reduction of your tax burden. Say you owe $15,000 in taxes this year. If you buy a home in 2009, you wouldn’t owe the IRS a penny because you can file it on your 2008 return. A tax deduction is just a reduction in the amount of income that is taxed…like the deduction you get for children.
Combine all the factors…
- A brand-new $15,000 government tax credit for any home buyer purchasing a primary residence
- Historically low interest rates hovering around 5% or lower
- Home prices that have reset (read dropped) to 2005 levels and earlier
- Huge home inventories across the country give buyers the ability to choose exactly what they want
- High inventories allow buyers to ask for ‘concessions’ like fencing, repairs, upgrades, and more
Put all these factors together and you get one of the best times to buy a home in recorded history.
But I have a home to sell…
I know many of you out there are worried about selling your home. Without mincing words, maybe you should be. If you have made less than stellar decisions in the past and purchased a home that was more than you could afford, has an exotic type loan that is killing you each month, or is in a part of the country where housing has lost half it’s value, then you have a problem. Realize now that it is not insurmountable. You can negotiate with your lender. You can (try to) make more money.
You can Capitalize on an opportunity even with a home to sell.
The main thing to realize is that the money or profit lost on the sale of your current home will either wash or be reversed by the money (or deal) gained in the one you are about to buy.
If you are considering taking advantage of the tax credit, low interest rates, and great home prices and have a home to sell or are ready to buy now in Northwest Arkansas, please contact me or call me directly at (479) 586-1525 to learn what your options are.
I have read a number of blogs and commentary on the subject of this new (and old) government tax credit and I know that there are heated opinions on both sides. I have tried to remain neutral (with the exception of showing the home buying benefits) but I would love to hear your thoughts on the matter so please leave your comment below.
UPDATE (2/12/2009) Right now it looks like the $15,000 credit will be lowered to $8,000 which is certainly less than homebuilders or Realtors would like. According to the National Assocation of Realtors the change will still create over 200,000 new home sales in an economy that certainly needs it. Everything I mentioned in the article above remains the same except for the amount of the tax credit. This is still not finalized so keep an eye out for changes in the coming weeks.
UPDATE (2/20/2009) If you are still confused about the Homebuyer tax credity visit this presentation put on by the National Association of Realtors and check out my post about HASP, the Housing Affordability and Stabilization Plan.
UPDATE (7/15/2009) For the most up-to-date information on the Tax Credit call our office at (479) 636-7777. There have been many changes since this post was last updated. The amount is $8,000, not $15,000 – still a great deal. You can view a countdown clock of the time left to take advantage of the tax credit at our brokerage website at Exitprorealestate.com.