The recently passed H.R. 3221, American Housing Rescue and Foreclosure Prevention Act of 2008 is aimed to improve the housing industry, and mainly reward first time home ownership.
The Grant Hickman Team has studied the changes in law and is ready to assist all buyers and sellers. Multiple home owners, veterans, and first time buyers should call The Grant Hickman Team to learn how the new law directly affects you. Below are a few of the changes.
The First Time Homebuyer Credit is more of a loan, with a zero-percent interest rate, to be repaid over 15 years. The credit allows first-time homebuyers of a principal residence in the United States to take a tax credit of 10 percent of the purchase price of the residence (not to exceed $7500).
• The credit will begin to phase out if single taxpayer’s income exceeds $75,000 per year or the couple’s income exceeds $150,000.
• The credit is to be paid back over 15 years and applies to residences purchased between April 9, 2008 and July 1, 2009.
• This is a refundable credit. That means, even if your total tax liability is zero, you can file to get this money directly from IRS.
Beware though; homeowners should know that if they sell the home in less than 15 years, the owner would have to repay the remainder of the credit immediately.
Other changes affect more than just first time homebuyers. H.R. 3221 will most likely affect every homeowner in one way or another. Some borrows may qualify to refinance into lower-cost government-insured mortgages. Veterans and current soldiers have more options and an increased VA Home Loan limit.
Other changes from the law include new standard deduction rules. Existing homeowners, who do not itemize, will be allowed an additional standard deduction for real property taxes, on both state and local property taxes paid (aprox. $500 or $1,000 for joint filers).
On January 1, 2009, vacation homes and rental properties will be considered “non-qualified” in new tax provisions. Owners of multiple homes should contact The Grant Hickman Team to learn about the new provisions, including capital gains taxation for non-excluded portions of the home.
Lastly, effective January 1, 2010, your credit and debit card payments to merchants will be reported to you and the IRS. The report will consist of your total annual gross payment card receipts. It is believed this change will correct income reports and raise more than $9.8 billion over ten-years, which will help supplement, other programs within H.R. 3221.
These are just an overview of some of the changes enacted by H.R. 3221. You need to call your area experts with The Grant Hickman Team, to learn how the H.R. 3221, American Housing Rescue and Foreclosure Prevention Act of 2008 personally affect you.