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Blog Weatherbee
23 February 2010
22 February 2010
Buy a house, get free money
I showed a house recently and was explaining the tax credit plan to the potential buyers when I realized that they had no idea that this plan even existed. Thru the power of social networking on the internet, I've made a couple of notes about it but I still don't think people really understand what this is all about. This is a great program for new homebuyers as well as previous homebuyers.
The hangup that I've noticed so far is the fact that this is a tax CREDIT and not a deduction. What does that mean? Keep in mind that I am a Realtor and not a CPA, so bear with me on this.
Let's say you make $50,000 and have $10,000 in taxes deducted from your paycheck by your employer. If you have a tax deduction, that comes off your taxable income. For example, if you had a deduction of $1000, your taxable income would be $49,000 and the amount of taxes you owe would decrease slightly.
However...and that's a BIG 'however'...The Federal Housing Tax Credit is not a deduction. It's a full tax credit from the amount of taxes you owe. In this situation, if you qualify as a new homebuyer you would get an $8000 tax CREDIT, meaning your tax liability goes from $10,000 to $2,000. That's really an incredible thing. Unless you did your W-4 incorrectly, you would probably get a bulk of that money back.
The tax credit isn't just for new homebuyers, though. If you have owned a house (and lived in it) for five of the last eight years, then you qualify for a $6,500 tax credit. Again, that comes off the amount of taxes you owe.
Don't believe me? Read it for yourself.
If you are looking at buying a new house, this is a great program to take advantage of, however it only lasts thru April 2010.
M
The hangup that I've noticed so far is the fact that this is a tax CREDIT and not a deduction. What does that mean? Keep in mind that I am a Realtor and not a CPA, so bear with me on this.
Let's say you make $50,000 and have $10,000 in taxes deducted from your paycheck by your employer. If you have a tax deduction, that comes off your taxable income. For example, if you had a deduction of $1000, your taxable income would be $49,000 and the amount of taxes you owe would decrease slightly.
However...and that's a BIG 'however'...The Federal Housing Tax Credit is not a deduction. It's a full tax credit from the amount of taxes you owe. In this situation, if you qualify as a new homebuyer you would get an $8000 tax CREDIT, meaning your tax liability goes from $10,000 to $2,000. That's really an incredible thing. Unless you did your W-4 incorrectly, you would probably get a bulk of that money back.
The tax credit isn't just for new homebuyers, though. If you have owned a house (and lived in it) for five of the last eight years, then you qualify for a $6,500 tax credit. Again, that comes off the amount of taxes you owe.
Don't believe me? Read it for yourself.
If you are looking at buying a new house, this is a great program to take advantage of, however it only lasts thru April 2010.
M
03 February 2010
Selling in the Rain
Don't get me wrong...I love the rain, especially after last year. We had an entire summer w/o rain and were praying for it in August, so the overabundance of rainfall over the last two months has been a bit of a nice change.
Rain tends to slow people down when they are looking for houses to buy or sell, though. For some reason the rain keeps people in the house or keeps them from being motivated to get out and see new houses. People who are looking to sell their houses are in the same boat because they will need a house to move into when they sell theirs, so they are buyers as well. Funny how that works...as agents we sometimes look past the fact that most home buyers are also sellers and vice-versa. That's potentially four different transactions for us to help our clients thru.
In about a month when the weather turns a bit warmer and the sun stays out longer, we'll see more people start to move around. They get "cabin fever" over the long, wet winter and are ready to be active outside. This is when we start seeing people have garage sales and trying to declutter their houses. That's the beginning of the process when our clients decide that their house is either too small (so they need something bigger) or they are just ready for a change.
In the meantime, we still have houses moving rapidly in the market and there are lots of buyers out there waiting for the right house to come available. Get the jump on things...houses still sell, even when it's raining. And most of all, it can't rain all the time.
M
Rain tends to slow people down when they are looking for houses to buy or sell, though. For some reason the rain keeps people in the house or keeps them from being motivated to get out and see new houses. People who are looking to sell their houses are in the same boat because they will need a house to move into when they sell theirs, so they are buyers as well. Funny how that works...as agents we sometimes look past the fact that most home buyers are also sellers and vice-versa. That's potentially four different transactions for us to help our clients thru.
In about a month when the weather turns a bit warmer and the sun stays out longer, we'll see more people start to move around. They get "cabin fever" over the long, wet winter and are ready to be active outside. This is when we start seeing people have garage sales and trying to declutter their houses. That's the beginning of the process when our clients decide that their house is either too small (so they need something bigger) or they are just ready for a change.
In the meantime, we still have houses moving rapidly in the market and there are lots of buyers out there waiting for the right house to come available. Get the jump on things...houses still sell, even when it's raining. And most of all, it can't rain all the time.
M
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