The First-Time Home Buyers? Tax Credit (HBTC)

25. October 2009 · Write a comment · Categories: General Tax · Tags: , , , ,

Right now, Canadian first-time home buyers can take advantage of the First-Time Home Buyers’ Tax Credit (HBTC). If you qualify and your home qualifies, this could be a nice bonus to taking the plunge of buying your first piece of residential real estate.

You qualify for the HBTC if you are a first-time home buyer who buys a home in Canada. For the purposes of this tax credit, “first-time home buyer” refers to anyone (and their spouse or common-law partner) who has not owned and lived in a residence during the year they buy or for any of the four years prior to their purchase. (If you are eligible for the Disability Tax Credit (DTC), you don’t have to be a first-time buyer to purchase)

The tax credit amount is determined by the lowest personal income tax rate of the year times 00. For instance, 2009’s lowest rate was 15%. Multiplied by the amount of 00, this equals 0. So, for 2009, the HBTC is 0. Each year, the credit is recalculated, so it may be higher or lower than previous years.

The beauty of this particular credit is the flexibility of the purchase options. In addition to the standard single-family home unit, this tax credit covers a lot of residential real estate. You can get this tax credit on a mobile home or even on a co-op where you own equity interest in a unit (Unfortunately, shares that only give you the right to tenant a unit are not eligible). Condos of all types qualify as well, with apartments, duplexes and whole apartment buildings.

You can only claim the HBTC once per dwelling, so if you and another eligible party jointly purchase a home, you can’t each get 0 in tax credits! However, you are able to share the credit if you so desire, so that each eligible party gets a share.

The 2009 and subsequent personal income tax returns will incorporate a new line that allows you to claim this credit. If someone else is doing your tax return, ensure that their attention is drawn to the fact that you are eligible for this credit. You don’t have to supply any supporting documents, but ensure that you have them easily accessible should the CRA want to take a look at them.

Keep the HBTC in mind when you consider buying a Canadian home. It’s just another great reason to take the final step of real estate home ownership.

Obama’s Federal Program Bringing Home Loans into Reach of First Time Home Buyers

24. October 2009 · Write a comment · Categories: General Tax · Tags: , , , , , , , , , ,

Economic weakness threatens the chances of many Americans to become homeowners and so threatens the nation’s ability to thrive as a nation. Keen to help, the federal government offers the First Time Home Buyer Stimulus Package. It targets first time buyers and those who have not owned a home in three or more years.

Purchases under this program are of pre-owned homes and homes in the new construction phase, stimulating demand in the housing market. Whether indirectly, by boosting buys of pre-owned homes, or directly, by boosting housing starts, this gives builders and their crews more work. As for homeowners, they receive help in three ways, with tax credits, assistance with down payments, and with decreased interest rates.

The initial purpose of the stimulus program was to stave off the economic slowdown of which existence became apparent during the financial crisis of 2008. The developing situation demanded reinforcement of these efforts, which came in the form of a more comprehensive plan from the federal government. In particular, the Obama administration believed that the reluctance to spend money came from the fear of losing home ownership. This, along with the collapse of real estate market, convinced to administration to act to stimulate home ownership.

For any purchase made in the year 2009, a homebuyer may qualify for a 10 percent tax credit. This may for up to ,000, with the basis being the gross purchase price. The home owner may claim this credit either the year of purchase or within two years of purchase. This tax credit provides money to the homeowner, which he may decide to save.

Next is a reduction in the down payment. Usually, these are at least ten percent of the home’s price. The government plan is to pay off part of the down payment. Lower down payments make it easier to purchase the home. Furthermore, reducing the down payment reduces the burdens keeping you from placing money in an investment account or from improving the new home. Also, government help may reduce the interest rate on your home loan by reducing the basis points on the interest rate. Qualification for the tax credit requires that a single person’s income not exceed , 000 and that with a partner income not exceed 0,000.

A third way to encourage home purchases is a tax rebate. In this case, the federal government places the rebate on the amount of interest assessed on the loan. This is not related to the tax credit. Under this stimulus program, homeowners may apply for both the credit and the rebate. Landlords, who buy property for income purposes, may qualify for the rebate. Because the landlord’s maintenance expenses go to the upkeep of the rented property, they are eligible for income tax deductions. Hence landlords are eligible for the rebate.

Economic growth is impossible without continuous improvement of the national infrastructure. However, the collapse in the demand for housing hits precisely here. The Obama adminstration intends to rectify this with tax credits, down payment assistance, and interest rate reductions. Under the First Time Home Buyer program, it intends to place buyers in new homes and stimulate economic activity.

More Tax Rebate Articles

Tax Credit for Home Buyers ? The Mortgage Credit Certificate Program

23. October 2009 · Write a comment · Categories: General Tax · Tags: , , , , ,

Tax credit for home buyers are becoming more and more popular every day.  Whether the economy is in an up cycle or a down, smart home buyers are looking for new ways to save money.  The good news is, if you’re a first time home buyer you may qualify for the Mortgage Credit Certificate.

The Mortgage Credit Certificate is a federal program which allows first time home buyers to lower their final income tax bill in the amount equal to twenty percent of the mortgage interest they pay as part of their mortgage. 

Here’s how it works…

Let’s say I’m buying my first house and I ask my mortgage lender if he knows of a tax credit for home buyers. He answers by introducing me to the Mortgage Credit Certificate program. 

At the end of the day, after explanations, charts, graphs, lessons and lectures I find out I’m going to pay ,421 in mortgage interest by the end of the first year. Twenty percent of ,421 is ,684. 

This means that when my personal income tax is due in the amount of ,164, I could apply my Mortgage Credit Certificate and only have to pay ,480.

Hey, not too bad. It’s almost like free money.

Next year I’ll receive another tax credit in the amount of 20% of the mortgage interest.  Since a little less is interest and more is principle, my tax credit might only be ,575.  In any event, if I add up these tax credits for 30 years I’m talking big bucks.

Even if I only live in the home for seven years it’s still well over ,000 in direct tax credits.

Of course, with every good there is an equal not-so-good.  There are restrictions.

There are purchase price limits; there are income limits; funds are limited; only two property types are included; certain restrictions apply.  Overall, though, qualifying might not be too difficult for many first time home buyers.  Ask if you have questions.

In summary, the MCC tax credit for home buyers is a program designed for first time home buyers allowing them a direct credit towards their income tax in the amount equal to 20% of their annual mortgage interest. Although certain restrictions, qualifying is not too difficult for many first time home buyers.

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Uk Tax Saving Tips

22. October 2009 · Write a comment · Categories: General Tax · Tags: ,

All of us like the idea of paying less tax. It can be a costly process. However, there are actually methods that you can put in place to save on tax costs and help your bank balance stay at a healthy level. These methods are all very easy to put in place, but not many people use them, meaning that they still face ever expanding tax costs.

One of the first things that you should do if you want to decrease the amount of tax costs that you incur, is to check to see if you are eligible for a tax rebate. There are hundreds of thousands of people who are eligible for a tax rebate, but they don’t even know it because they don’t check. Investigate tax rebates, and contact the right people to see if you are eligible for a tax rebate. You could be in for a nice surprise.

We all know about tax credits. However, not everyone who should be claiming them actually does it, which means that they are not receiving what they are entitled to. The best way to see what form of tax credits you are entitled to is to go to the Direct Gov website. There you will be able to see if there is anything that you should be claiming that you are not.

ISA’s are a great way to manage your savings without incurring tax deductions. Currently in the United Kingdom there are thousands of banks that offer ISA plans, but many people are put off using them. Basically, t allows you to manage your savings in investments where the tax man cant touch any money that you save.

A final method of saving on tax is to manage your pension. If you are employed then it is very likely that you will have a pension plan. You should make use of this pension plan, as again, any money that goes into this is tax free, so there are no charges for you to incur.

The methods above are all very simple and very easy to put in place, but many people skim over them as they think that they wont make much of a difference, but all of them put together really do build up. If you want to do some more research then you can go to many different websites.

The first one that you should go to is the Direct Gov website, as this website will tell you everything that you will need to know about tax savings. It is also a good idea to check out the different money saving forums, as this will allow you to compare notes with people in a similar position.

More Tax Rebate Articles

Employers can benefit from Katrina Tax Credits

22. October 2009 · Write a comment · Categories: General Tax · Tags: , , , ,

Ever since the disaster that struck when Hurricane Katrina hit, the community has been looking for ways to get back on its feet.  With Katrina tax credits, the Federal government has come up with an income tax credit to encourage employers to hire more people who live within the disaster-struck area and those who lost their jobs because of the event.  Basically, the businesses that hire employees outside of the affected area can get a tax credit if they hire people affected by Hurricane Katrina.  This means that the people should have begun work after August 29, 2005 and before December 31, 2005.

Usually, employers are expected to file WOTC forms to take advantage of the Katrina tax credits but in this special case the standard forms are waived.  There are new forms that are developed and these are the ones that the businesses should fill out for the IRS.  Other Katrina tax credit benefits include tax breaks for those who provide temporary housing for those who lost their homes during the storm.  So anybody who is providing rent-free housing to Hurricane Katrina victims for at least 60 days will be able to take a tax deduction up to 0 per person.  A maximum deduction for this kind of credit is up to 00.

Of course, the Katrina tax credits are mostly aimed at employers and they will be able to enjoy a number of tax breaks for employing victims of the hurricane.  WOTC or work opportunity tax credit is just one of those tax breaks and they can get tax credit just for hiring individuals.  They will still have to fall under certain group categories and this includes people who lived in an area that is eligible for assistance.  Employers were able to claim the credit for the following two years.

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