Angie Raetz

First-Time Home Buyer Tax Credit: 6 Things to Know

While the proposed $15,000 home-buyer tax credit died in negotiations between the House and the Senate, the $787 billion stimulus bill that President Barack Obama signed into law Tuesday includes a similar--albeit smaller--measure designed to help revive the real estate market. Here are six things you need to know about the freshly-enacted $8,000 first-time home buyer tax credit.

1. Eight grand, new buyers: The tax credit included in the economic stimulus legislation is much narrower than the $15,000 proposal. This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.

2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.

3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.

4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.

5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.

6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

Great news! There is now a network of Madison city HOAs pulled together on a website and they have generated their first newsletter. They will hold quarterly meetings featuring pertinent topics and speakers. Participation by HOAs is voluntary. There are no dues, although contributions are sometimes solicited for specific purposes. Unofficial participation is simply by attending meetings and recieving email. Preferred participation by HOAs, and to be allowed a vote, is by submitting an application and sharing your HOA information and experiences. MHOAN is a great help to those HOAs that have not transitioned away from Developer control.

www.themadisonHOAnetwork.org

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Great news! There is now a network of Madison city HOAs pulled together on a website and they have generated their first newsletter. They will hold quarterly meetings featuring pertinent topics and speakers. Participation by HOAs is voluntary. There are no dues, although contributions are sometimes solicited for specific purposes. Unofficial participation is simply by attending meetings and recieving email. Preferred participation by HOAs, and to be allowed a vote, is by submitting an application and sharing your HOA information and experiences. MHOAN is a great help to those HOAs that have not transitioned away from Developer control.

www.themadisonHOAnetwork.org

Information

• Communities
• NEWS
• Current Newsletter
• Neighborhood Watch
• Traffic Safety
• Meeting Facilities
• Board members
• History of Madison
• Links
• Map

These statistics should represent residential sales of houses, condos and townhomes in your board area.
            For this report, please use statistics for single-family residential sales only. Do not include lots or
            commercial properties.
            
            For your information, the median sales price is the price that lies in the middle of the list of prices of
            homes sold, ranked in order of amount (lowest to highest or vice versa). In other words, half the homes in
            your area sold for more, half sold for less. In most cases, boards with an MLS can use their MLS software to generate this monthly number.
            
            

Home Buyer Tax Credit Update

Congress is actively considering an expanded home buyer tax credit, and the Senate has approved the following improvements:

• The tax credit amount increases to $15,000.
• The tax credit is extended to anyone buying a principal residence.
• The tax credit will apply to all purchases occuring within a year after the bill is signed into law.
• It is a true tax credit; it does not have to be repaid.

Please call your Senators and urge support for the expanded home buyer tax credit. To reach your Senators, call 1-866-924-NAHB (6242).