The much talked about $15,000 home-buyer tax credit died silently behind closed doors, during negotiations between the House and the Senate last week. Apparently no memorial service will be held.
The brand new $787 billion stimulus bill that President Obama just signed into law Tuesday, does include a trimmed down version still aimed at reviving the real estate market.
Although the exact details of the stimulus bill have been few and far between, this is what is believed to be true about the home buyer credit in this new plan:
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The new Stimulus bill includes an $8,000 First-Time Home Buyer Tax Credit.
Here are seven things you need to know about this newly created provision:
1. Only For New buyers: This credit will be only available to first-time home buyers, who purchase a home between January 1 and November 30, 2009. It will be the lessor of $8,000 or 10% of the value of the home. Remember a tax credit is very different than a tax deduction - a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income. But unlike the earlier $7,500 home buyer tax credit passed last year, this one does not have to be repaid.
2. Eligible Property: Any single family property that will be used as a primary residence. Condos, co-ops and townhouses qualify, as long as they will be used as the primary residence.
3. First Time Buyers Defined: A "first-time home buyer" is someone who hasn't owned a principal residence for three years prior to the purchase of this home. (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.
4. 2009 Buyers Only: Only those who purchase a home between January 1, 2009 and November 30, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.
5. Income Limits: The tax credit is subject to limitations, and starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.
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 may be made in certain cases, such as death or divorce.)
7. Refundable: this credit can reduces or eliminate income tax liability for the year of the purchase. Any unused amount of the tax credit will be refunded to the purchaser when a future tax return is filed.
Is this new home buyers credit worthwhile?
Positives:
* It does not have to be repaid. This is a huge improvement over the $7500 credit passed last year, which had to be repaid. Due to the requirement to repay, most of the people that were buying did not even bother to apply for the credit.
* The eligible property, and personal income limits are reasonable.
Negatives:
*This credit is for only $8000, not the $15,000 originally in the bill. $15,000 is a much nicer number, and would have encouraged a larger number of people to make the decision to purchase a home now. After all, that is the whole idea.
* This provision is limited to first time home buyers only. While great for first time home buyers, they are only a very small percentage of the home buyers pool. This is a huge negative... the powers that be really missed the boat on this one.
Will this new home buyer credit be successful in encouraging people to buy now, and help stimulate the real estate market?
It will help a little, and every little bit helps. However it would have been far more successful had the credit been larger, and especially without the first time buyers clause. Restricting the credit to only first time buyers will severely limit its overall effectiveness.
Upcoming Events
Thursday, October 23
Blood Drive - 9:30am-2:30pm - Glenn High School
Friday, October 24
Kernersville YMCA Fall Festival - 5:00-8:00pm - YMCA
Saturday, October 25
Kernersville Parks & Rec. Department Trickfest - 12:00-4:00pm - Forth Of July Park
Strange Tales at Korner's Folly - 7:00-9:00pm - Korner's Folly
Cherry Street UMC, 117 N Cherry Street, Yard, Bake and Breakfast sale - 8:00am-11:30am
Sedge Garden UMC Halloween Carnival - 6:00-8:00pm
Sunday, October 26
Birdwatching 101 - 2:00-4:00pm - Triad Park
Monday, October 27
Kernersville YMCA Open House
Wednesday, October 29
Health Screening - Beginning 9:00 by appointment - Senior Enrichment Center/Paddison Memorial Library
Friday, October 31
Halloween Trunk-A-Treat - 6:00-7:30 - Century Park Baptist Church
The Kernersville Annual Fall Festival will be this Friday October 18th, from 5-9pm.
This 18th annual event is open to the community, there is no admission charge!
Activities will include face painting, bounce houses, hay rides and a cake walk. Game tickets are 25 cents each, and winning tickets can be turned in for a variety of prizes and treats. The theme is "Family Fun", and there will be different games for everyone. According to the YMCA, the programs and activities are all family friendly.
Proceeds from the festival will go to support the YMCA's Partnership With Youth Campaign, which provides financial assistance to residents participating in various YMCA programs. By attending the fall festival, you are helping area families benefit from other YMCA programs, not to mention having a great time!
Come on out to the YMCA Fall Festival and have some fun!
Richard Schardt
Plans moving forward for the Union Cross Towne Centre in Kernersville
Located on an 85 acre site at the intersection of Union Cross Road and I-40 in Kernersville, The Union Cross Towne Centre will be a mixed-use development consisting of retail, hotel, restaurants, and some residential. According to the developer, the center will have five natural water features, courtyards with seating and a well landscaped streetscape.
The Union Cross Towne Centre will serve a market that has had an increase of 13,000+ housing units within a five mile radius of the site in less than two years. A new Interchange for the Union Cross exit on I-40 will be constructed by NCDOT.
Plans include 244,000 square feet of retail on the first level, 100,000 square feet of apartments and office space on the second floor, up to 200 villas/town homes, multiple restaurant sites, one hotel site, a 16 screen movie theater, a drug store and a bank site. Two companies have already announced: Hampton Inn, and Rite Aid drug stores.
The Union Cross Towne Centre will be a great new addition to this part of Kernersville!
Richard Schardt
Technology based Real Estate services for the Triad area of North Carolina.
My focus is the residential side of real estate. I like working with new construction, first time buyers, and boomers. First time buyers are fun, they are always very enthusiastic and exited about their first real estate purchase. I also like working with boomers, perhaps since I am a borderline boomer myself.
As a real estate professional, I make every effort to deliver a level of service that far exceeds my clients' expectations. This is the first step in building long lasting relationships that are more than just a successful real estate transaction.
Communication is the most important means to provide the best possible customer service. I pledge to keep my clients updated on a specific schedule. Since everyone has different expectations, I ask my clients to tell me how often, and by what means they wish to hear from me, and then I follow it exactly.
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