Obama’s Stimulus Package Offers First Time Home Buyers Huge Benefits!

26. May 2011 · Write a comment · Categories: General Tax · Tags: , , , , , , , , ,

If you’ve been following the news, you are likely familiar with the federal government’s 0-900 billion stimulus package designed to boost the economy by creating new jobs, providing mortgage assistance, educational grants, and a suite of other incentives.  A key part of this package is the first time home buyer stimulus program aimed at reviving the ailing housing market by assisting first time home buyers and buyers who haven’t purchased a home in the last three years.  The incentives for those qualifying under this program are such that even those previously opposed to buying a home in this market are now changing their minds.

The main reason the first time home buyer stimulus package is so attractive is that it directly addresses the concerns that most people have about buying a new home.  The first concern that most people have is how they will come up with the down payment.  After all, you must have a considerable sum of money saved away in order to come up with a ten percent down payment.  Thanks to the stimulus package, however, the federal government will help first time buyers by paying a percentage of the down payment.  In other words, you do not have to come up with the full amount on your own.  The second worry is the dreaded interest that accompanies monthly mortgage payments.  There is good news here as well as the federal government has cut interest rates.  Thirdly, those qualifying as first time home buyers can apply for refundable tax credit of ten percent of the purchase price of their homes (up to ,000) if they enter into a binding agreement by April 30th of next year.  This is practically money in your pocket which you do not have to pay back unless you decide to sell or move out of your home within the first three years.

With all these benefits, no wonder more and more people are getting exciting about buying a new home in these tough economic times.  These incentives will not last forever so if you have a steady source of income and are serious about owning your own home, now is the time to act.

Obama and the Federal Government Offers Financial Help to First Time Home Owners

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

Young families have found that purchasing a new home has become almost impossible during the last few years. Now, the federal government is offering help via a new stimulus package. By assisting families in making their first home purchase, the government is hoping to stop the decline in the US real estate market and help Americans again achieve their dream of homeownership. The First Time Home Buyers Stimulus Package is specifically directed to buyers who have not owned a home for the past three years. Both new homes and pre-owned home qualify for federal assistance. The government specifically hopes that new home purchases will assist job creation in the currently weak housing industry.

The program in hoping to stimulate the economy and encourage home purchases via tax credits, assistance with down payments, and lower mortgage rates.

The program began in 2008 but was initially only modestly successful. The economic was too weak at that point and most Americans were very reluctant to purchase a new home when house prices were still declining.

The current program permits a 10 percent tax credit for any home purchased between January 1, 2009 and December 31, 2009. The maximum allowed amount is ,000. Homeowners may claim the credit on their income tax either in the first year of purchase or the following year. For many this tax saving could be substantial and could permit additional savings in the family budget.

The program also facilitates a reduced down payment. As the housing sector of the economy worsened, many banks have tightened their loan requirements. In the case of home mortgages, a ten percent down payments and in some case twenty percent down payments is now common. This program will assist Americans to comply with the least down payment possible, and will produce lower loan origination fees.

The program income guidelines are clearly intended to assist middle class Americans. If you are unmarried, your annual income can not exceed ,000. The annual income limit for a couple is double that — at or below 0,000.

The third portion of the program involves receiving a tax rebate. The actual dollar amount of the rebate will be determined by the interest rate of the home mortgage. Additionally, under this plan the first time homebuyer can actually qualify for both a tax credit and a tax rebate. This distinction is very important. Under this program, a tax rebate can be received for both owner-occupied homes as well as income property. One benefit of being a landlord, not often understood by first time buyers, is that maintenance expenses on income property are legitimate tax deductions. This makes income property a very good investment.

The success of this government program will be a win for our country and a win for first time home buyers. It is well understood by everyone, that our economic recovery and future growth, are very dependent on a healthy housing market. Middle-class Americans would be wise to take advantage of this program to improve their personal lives and at the same time help our countries return to a healthy housing economy.

More Tax Rebate Articles

Stimulus Energy Tax Credit Program Offers Incentive to Replace Windows and Doors

27. September 2009 · Write a comment · Categories: General Tax · Tags: , , , , , , , ,

On February 17th, President Obama signed the 9 billion economic stimulus bill that includes tax credit incentives for homeowners who make energy-efficient home improvements. The bill extends eligibility for tax credits through 2010 on energy-efficient improvements — including qualifying windows and doors!

The bill includes the ability for homeowners to receive a tax credit of 30 percent of the cost of qualifying energy-efficient products (windows, doors, insulation, HVAC, and roofs), up to a maximum of ,500 per household for all improvements made in 2009 and 2010.

The requirements to qualify for the new energy tax credit include:

Windows purchased must be equal to or below a U-Factor of 0.30 and a Solar Heat Gain Coefficient (SHGC) of 0.30. The purchase of the qualified windows must be made during the taxable year for which the credit is being claimed. The credit is only allowed on the price of the qualified windows themselves, not on installation costs, onsite preparation, assembly or sales tax. The tax credit is allowable only for qualified window units placed in service in 2009 and 2010. Homeowners must save their receipts for purchased windows, along with all window labels and stickers for verification and tax recordkeeping. The windows must be installed in the taxpayer’s principal residence. This tax credit is capped at a total of ,500 for the years of 2009 and 2010. Unlike a tax deduction, which only reduces the amount of your taxable income, a tax credit reduces the amount of tax you owe.

ENERGY STAR® is a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy helping us all save money and protect the environment through energy-efficient products and practices. Check out energystar.gov/tax credit for more information on the available federal tax credit when you purchase energy-efficient windows and doors.