The First Time Home Buyer Tax Credit has been extended and expanded! You can read the article below for the specifics, but if you have any questions on how the First Time Home Buyer Tax Credit works or if it applies to you, contact me. Jeff@thecameronteam.com
This is helping the recovery by increasing the amount of buyers today. By increasing the amount of home buyers, we increase DEMAND. If supply stays the same and Demand increases the market improves and we all win!
Many of these distressed homes would not be bought by home buyers without the First Time Home Buyer Tax Credit. You see many of these buyers don’t have the money to fix up the homes. This tax credit gives them the opportunity to buy the home and know they can repair the differed maintanance the homes need.
Let me give you an example. If a home needed say $8,000 worth of these repairs: $1,000 paint, $1,000 yard clean up and new plants, $3,000 florring, $2,000 appliances and another $1,000 in miscellaneous issues; now a owner occupant can buy the home and conduct these repairs. Let’s just say this home would sell for $150,000 to a home buyer. What would an investor be willing to buy this distressed home for??? If, for example, the home would sell at say $165,000 after the repairs here is what an investor would look at: $160,000 sales price, less $8,000 in repairs, less $11,000 in transaction fees, less $5,000 for 3 months holding costs, less $24,000(which is $8,400 in Taxes and $15,600 in after tax profit) in estimated profit if no other costs come up. In this example, The investor would be willing to pay $112,000 for the home. WOULD YOU PREFER THE HOME SELL FOR $150,000 OR FOR $112,000??? Which do you think helps the neighborhood more?
Home buyer tax credit extended, expanded
Phoenix Business Journal – by Kent Hoover Washington Bureau Chief
The House of Representatives passed legislation Thursday that would extend and expand the tax credit for first-time home buyers.
The provision was included in a bill that also extends unemployment benefits by an additional 14 to 20 weeks and lets all companies, not just small businesses, carry back current losses to offset profits made as long as five years ago. The bill passed the House on a 403-12 vote. The Senate passed the legislation 98-0 Wednesday, and President Barack Obama is expected to sign it into law Friday.
The $8,000 first-time home buyer tax credit, which helped home sales rebound this year, was scheduled to expire Nov. 30. The legislation extends it to homes that are under contract by April 30, 2010, and creates a new $6,500 tax credit for owners of existing homes who buy a new principal residence. To take advantage of this credit, buyers must have lived in their old house for at least five of the past eight years.
The legislation also increases the income eligibility limits for the tax credit from $75,000 to $125,000 for individuals, and from $150,000 to $225,000 for joint filers. The cost of the home cannot exceed $800,000.
More than 1.4 million households have benefited from the current tax credit, “the majority of whom have incomes below $50,000,” said Rep. John Lewis, D-Ga.
“This legislation would help even more moderate-income families fulfill the American dream,” he said.
Sen. Johnny Isakson, R-Ga., pushed the Senate to expand the tax credit to “move-up” home buyers. He said this is the last time the tax credit will be extended.
“I urge all Americans, whether they’re first-time buyers who’ve always dreamed of buying a home of their own or someone who’s been gridlocked in the failure of our move-up market, to take advantage of this opportunity,” said Isakson, a former Realtor.
The National Association of Home Builders predicts the extended and expanded tax credit will generate 180,000 additional home sales.
Read the whole story here: http://bit.ly/3utWPA
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