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They Finally Came to an Agreement
Congress reached it’s agreement on a $789 billion stimulus package. The President expected to sign it into law later this week. The clock may be ticking for this year’s home buyers and homeowners.
The massive package contains two benefits related to housing.
For First Time Homebuyers
The first provision is fairly well-known. It gives first-time home buyers an $8,000 tax credit provided they purchase a home between January 1, 2009 and August 31, 2009.
This is a true tax credit.
The $8,000 credit requires home buyers to hold property for at least 3 years. If the home is sold in fewer than 3 years, the tax credit must be repaid to the government. Bummer.
It’s also worth noting that the date range applies closings and not sales agreements.
Closings must occur within these 8 months to be eligible.
The Government Goes Green
A second noteworthy feature in the package is that the stimulus package gives existing homeowners incentive to make their homes more “green”. With available tax credits for energy-efficient windows and doors, furnaces and insulation, homeowners can claim larger tax deductions based on home improvement, up to $1,500.
Remember though, just because the government provides housing-related tax benefits doesn’t mean you should just act on them blindly. Tax liability is a highly individual item and you may be ineligible for any number of reasons. Be sure to discuss your plans with a qualified accountant before taking action.
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Comments
02.16.09
This is something similar to what they're doing in Australia.
If you're a first home buyer, you will get $24000 for new house or $14000 for already established property. But instead of tax credit, we're given straight cash. I'm not familiar with the term tax credit but I assumed you don't get cash deposited to your bank account straight away on the
Plus the government abolish the stamp duty of purchasing the house as well here.
To be honest, this whole thing has proven to be a very successful deal for us Australian first home buyers. There's actually an increase of buyers (approx 10-30% depending on which state you are in). Obviously credits and mortgages are still very hard to get but to us this has help the housing market, giving it some boost.
This is (IMO) a good thing for Generation Y like me who wish to own a house one day. In fact, I am in the process of hunting for a new house to built.
Would be interesting to follow if the $8000 tax credit will help the US households at all.
07.10.09
Hello, I'm a first time home buyer and what I'd like to know would Georgia be one of the states that this stimulus package is for. If so what parts of Georgia and is there a dead line? Also, what are the stipulations?
Thanks
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