We're stuck a bit between a rock and a hard place in this country. We need money to stimulate the economy, but we have to borrow the money we need--a highly questionable course of action.
According to this RISMedia article, 1.4 million families have filed to receive the tax credit. That equals roughly $11 billion. That might seem small compared to the kind of money we've watched exit Washington over the past year, but it's still a good chunk of change.
Money for the tax credits money comes from somewhere [read: us]; the government isn't independently wealthy. How long can we keep this up?
On the flip side, the incentive appears to be a success. Encouraged by the response and the subsequent boost to the housing market (Boise is no exception), Congress might be wise to extend it another year. But even if they don't, you can't put a price tag on buyer confidence, which is certainly what the tax credit has encouraged.
Search the local market from your cell phone. As you drive the local area, just call 208-473-7070 (the Audio Search number) and enter the street # of the property of interest.
Maybe you're online and see a property you like. Oops, gotta run! No worries--you have 473-7070 saved in your phone, and you enter the street # as you dash out the door. Listen to information about the property while you walk to your car!
If you like, property info can be automatically emailed to you. Most importantly, we will not follow-up after each property inquiry if your mobile phone is activated. (Click here to do that.)
Home Shopping at its most convenient...and fun.
PS: You can choose to have property information presented in English or Spanish, too!.
-First-time homebuyers: The Recovery Act provides a credit of up to $8,000 if a taxpayer buys a home between Jan. 1, 2009 and Nov. 30, 2009. The homebuyer also must not have owned a home in the previous three years and the home must be the primary residence.
[We add: Time is running out to take advantage of the tax credit. If you want to ensure that you have time to find what you're looking for, get your offer accepted and successfully CLOSE the deal, you need to start within the next month.]
-Job relocation: Taxpayers who moved due to a job change can deduct the cost of moving.
-Home improvements and energy credits: The Recovery Act gives incentives to homeowners making improvements and energy-efficient upgrades to their homes. Taxpayers can get credits for 30% of the cost of qualifying doors, windows, HVAC, water heaters, roofing and insulation, up to a maximum credit of $1,500. Solar energy and wind energy systems are each 30% of cost with no maximum.
It's been an especially rough couple years for Boise's new condominium market, which is almost exclusively centered in downtown Boise.
Nearly a dozen projects began construction or were rumored to begin within the last five years alone. Off the top of my head, I can think of five that are within a five mile radius.
Needless to say, in a city this size and a relatively sluggish market, there isn't enough demand for the supply of active condos on the market.
It's discouraging, but not really a surprise, then, that Cityside Lofts is going to try to auction off five of their homes. According to this Idaho Business Review article, not a single condo has sold this year.
The Spokesman Review attributes the increase to dropping home prices and first-time home buyers eager to capitalize on the tax credit before the looming December deadline.
Keller Williams Realty Boise Helps Paint the Town!
Keller Williams Boise joined Paint the Town on June 13th. Team members painted the house in four hours! Two deserving families got some needed help with their homes.
In Case You Haven't Heard: Use the $8,000 Tax Credit for Closing Costs!
In an unprecendented move, the US Department of Housing and Urban Development announced that the The American Recovery and Reinvestment Act's much-touted $8,000 home buyer tax credit can be used IMMEDIATELY to HELP first-time homebuyers buy a home.
HUD hopes that the plan will stimulate new home sales and help stabilize housing market.
Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. [In the past, the law did] not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but...[now]...lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate.
[snip]
Today's action permits the first-time homebuyer's anticipated tax credit under the Recovery Act to be applied toward the family's home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.
Now, this is month-old news, but many home buyers who are on the fence still haven't heard the good news. Remember--the tax credit is NOT LIMITED to first-time buyers. If you haven't owned a home for at least the last three years, you are probably eligible for the credit.
No Federal Income Tax Due on Principal Mortgage Debt Forgiveness
Here is an innovative way the government is encouraging home owners to "short sale" their home (rather than be foreclosed upon) and helping keep them out of bankruptcy court.
The IRS has created an exemption from its general rule to treat debt forgiveness as ordinary income. In the past, a lender that reduced the payoff amount on a home would 1099 the Seller for the amount of debt forgiveness. Under the new law, there is no federal income tax due on debt forgiven on a loan that is secured by the Seller's principal residence, provided that the loan was made to acquire, construct, or substantially improve the principal residence. A refinance of that type of loan also qualifies for the exemption.
Sorry, the rule doesn't apply if you pulled money out of your house to pay for something like a vacation and got debt relief on that loan.
The exemption applies to any portion of loan debt forgiven beginning January 1, 2007 through December 31, 2009. Put another way, it doesn't matter when the loan was made; what matters is when a portion of the debt is forgiven.
