First-time buyer tax credit a hit
Program on track to exceed 2 million target
By Inman News, Tuesday, April 21, 2009.Preliminary numbers from the Internal Revenue Service suggest 1.4 million taxpayers will claim the federal first-time homebuyer tax credit on their 2008 tax returns, meaning the program is likely to meet or exceed the 2 million target set by lawmakers before it sunsets Nov. 30, 2009.
A report by the Treasury Inspector General for Tax Administration, which looks at 56.9 million tax returns received through March 6, revealed that 567,685 households claimed the tax credit, but 38,158 weren't eligible because they may have been homeowners in the last three years.
If those trends hold up for all 140 million tax returns the IRS expects this year, about 1.4 million households will claim the first-time homebuyer tax credit, but about 94,000 of those will be disqualified because they are not first-time homebuyers.
A first-time homebuyer is defined as anyone who hasn't had an ownership interest in a principal residence for three years, and income limits also apply.
IRS Form 5405 will allow qualifying buyers to claim the credit on either their 2008 or 2009 tax returns, so many people purchasing homes this year won't be claiming the credit until next year. The credit is equal to 10 percent of the purchase price of the home, and is capped at $8,000 for homes purchased this year.
Processing the tax returns of those who claim the credit has been complicated by lawmakers' decision to bolster the program in 2009, the Treasury Inspector General said in its report.
For first-time homebuyers who purchased between April 8, 2008, and Dec. 31, 2008, the credit maxes out at $7,500, and is like an interest-free loan that must be repaid over a 15-year period.
The American Recovery and Reinvestment Act of 2009 raised the cap to $8,000 for homes purchased before Dec. 1 of this year, and eliminated the repayment requirement unless a home is resold within three years. ...CONTINUED
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Submitted by Bruce Hahn on April 21, 2009 - 12:28pm.
American Homeowners Grassroots Alliance
This is great news because ultimately the only way to clear out excess housing inventory is by bringing new buyers into the market. Every one of them frees up additional buyers/sellers upstream. They are also helping to slow further declines in housing values and bring some normalcy back into the market, which is good for all homeowners.
Bruce Hahn
American Homeowners Grassroots Alliance
Submitted by Amy Zepeda on April 21, 2009 - 1:32pm.
We have been promoting this tax benefit to all of our first time home buyer clients as well as our realtor partners. It has been a great asset to our company and our clients. Realtors have a product to promote to potential and current clients. With as much inventory as we have on the market in Dallas, it has been a "win-win" situation for all parties involved. I agree with Bruce, it has been a great vehicle to take some of the existing inventory off of the market and incentivizes buyers to make a decision about purchasing a home.
Amy Zepeda
Meridian Lending Partners
Dallas, Texas
amy@meridianlendingparters.com
www.meridianlendingpartners.com
214.356.0233
Submitted by Larry Whited Sr. on April 21, 2009 - 1:57pm.
It has stimulated sales through out Ohio.
Refreshing to see a government program really work as intended.
Larry A. Whited, Sr., CRB, CRS, GRI
President & Founder
www.maxUnet.com & www.WebMLS.net
A Virtual Real Estate Franchise System
** Virtual Is the Future **
P.O. Box 757
West Chester Ohio 45071
Direct - (513) 543-2727 Fax - (513) 297-7497
Submitted by Bill Williams on April 22, 2009 - 7:24am.
I believe that the Federal Government should follow Califoria's lead and offer ten thousand dollar credit for the standing stock of new construction homes and a fifteen thousand dollar credit for all new contracts for homes to be built between today and June 1,2010. That way we will be creating jobs and selling procucts from "shingles to sidewalks" Job creation is more important than anything else to this industry. I am surprised that no one is addressing that issue. Our Government is throwing money around foolishly and paying no attention to creating the "real" jobs that we need to bring back buyer confidence.