Thursday, April 2, 2009

Get in Line for Your $18,000

Feeling left out watching the Government doling out gajillions of dollars to all these failing banks, car manufacturers, states (ours) and other businesses?  Just in case you missed it, the Federal government wants to give YOU money too.  To help revive the housing market, the Federal government is offering an $8,000 tax credit to all first time home buyers (FTHB's) who qualify.  What is a tax credit?  A tax credit is not a deduction or reduction of your taxable income, it is a literal dollar for dollar amount of money the IRS will give you if you purchase a home before November 31st, 2009.  So if you normally get $100 back after filing taxes, next year you would get $8,100!

The $8,000 Federal Tax Credit is:

  1. Non Repayable (unless you sell the home before 3 years of ownership).

  2. Available to FTHB who occupy the home (not for buying a home to rent out).

  3. Has income limits of $75,000 for individuals and $150,000 for married couples.

Our California government also jumped on the bandwagon of giving money away to help both home builders and home buyers like you, but with a few different criteria.

Details on the California $10,000 Tax Credit:

  1. Available to ALL home buyers purchasing owner occupied homes (don't have to be a first timer).

  2. Must purchase home before March 1, 2010.

  3. Property/home must be a new built home.

  4. No income restrictions/limitations

  5. Non-repayable unless you sell the home within two years.

  6. The credit is paid back to you over a three year period.

  7. Funds are limited, on a first come basis to $100,000,000.

So far there have been 1,710 applications for the California tax credit.  So hurry up and decide if you want to buy a home before the money runs out.  Guess what?  Add the tax credits together and the $18,000 dollars would pay your mortgage payment for about 11 months!  This could be your own personal bailout.

To read more about the tax credits, have questions about how to buy a home, or anything else having to do with Real Estate or home loan financing, check out my blogsite.

What does this mean for our local Inland Empire residents who rely so heavily on the housing market?  These incentives will help sell off the existing inventory of both existing and newly built homes and get rid of all those for sale signs that say 'Bank Owned' on them.  When this happens, builders will start building more homes, ordering materials, and hiring more workers.   All of which will help stabilize our local economy.  The tax credits, which put cold hard cash back into a home buyers pocket, should spur spending on things like home improvement, car purchases, entertainment, paying off debt, and much more.

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