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Senate approves Homebuyer Tax Credit…UPDATE

Oh well…It was a shot in the dark but the amended amendment is still ok.  Is this good news for Hoboken real estate and the rest of New Jersey?  The $15,000 tax credit that we anticipated until last week has AGAIN been amended and its final.  The American Recovery and Reinvestment Act allows a tax credit of $8,000 for homebuyers.  The effective dates for this credit is after January 1, 2009 and before December 1, 2009.  The tax credit is NOT subject to recapture as long as the homeowner lives in the residence for over 3 years.  If the home is sold inside of 3 years, the entire tax credit is recaptured upon the sale of the house. 

To take advantage of the entire $8,000 the adjusted gross income of the buyer cannot exceed $75,000 or if jointly filed, cannot exceed $150,000. 

Will this help the ailing real estate market?  Maybe, maybe not.  But with Fannie Mae / Freddie Mac lifting some restrictions and making financing a reality again, this may be a factor in helping the market.  Keep in mind, we are far from a recovery.  We first have to hit a stagnation in pricing.  As government incentives increase, buyer demand increases as well.

The following article was written February 4, following the potential $15,000 tax credit.  Revisions are stated in the article above.

The U.S Senate approved an amendment today to the American Recovery and Reinvestment Act of 2009 (H.R.1) that would allow a tax credit of up to $15,000 for the purchase of qualified homes.

Previously, the tax credit for home buyers had a cap of $7,500.  The new amendment increases to $15,000 and includes new as well as re-sale homes. 

Only primary residence purchases in 2009 qualify.  The amendment states that an amount of 10% of the home purchase price not to exceed $15,000 could be applied for this tax credit.  The credit may also be equally split across two years at the taxpayers choice. 

Will this help the housing market?  Not sure it will get us out of this mess, but it’s a start and it will get a lot of “iffy” buyers off the fence and stimulate them to think again and possibly turn their “maybe” into a “yes”.  I wrote an article a couple of weeks ago on the $7,500 tax credit and mentioned it was only available for first time home buyers.  This amendment clearly states that this new $15,000 tax credit is available to ANY homebuyer, not ONLY first timers.  This is great news.

If you are interested in buying a home in 2009, contact us and we will organize a meeting with a tax professional to structure your tax credit.  Whether it is our recommended tax guy or yours, you definately want to seek the advice of a tax professional to take advantage of this incentive.

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