Extension of homebuyer tax credit
An extension of the homebuyer tax credit is assured, now that both the Senate and House of Representatives have passed the measure. President Barack Obama is expected to sign the new homebuyer tax credit bill on Friday, Nov. 6.
The Senate's 98-0 unanimous approval of the measure on Nov. 4, followed by passage in the House on Thursday by a 403-12 vote the following day, is an indication of how popular the program is. It is attached to a bill that will also give 20 weeks of extra unemployment insurance to people who have been jobless since last year.
Only first-time homebuyers were eligible to benefit from the original tax credit, which was first offered as part of the Housing and Economic Recovery Act of 2008. At that time, a $7,500 first-time home buyer tax credit was available for those who purchased a home between April 8, 2008, and July 1, 2009. Then, under Obama's American Recovery and Reinvestment Act of 2009, Congress raised the credit to $8,000 and extended the deadline to Nov. 30.
The extension of the homebuyer tax credit, as stated in House Bill 3548, makes the program available to many current homeowners as well as first-time home buyers. First-time buyers (or anyone who hasn't owned a home in the past three years) would still be able to get the $8,000 credit, and current qualified homeowners could get a tax credit of up to $6,500. The lesser amount would be available to homebuyers who have been in their current residence for a consecutive five-year period in the past eight years. To qualify for the tax credit, participants must meet certain income limits and would have to sign a purchase agreement by April 30, 2010, and close by June 30.
Under the new bill, intended to help spur activity in the slumping real estate market in Chicago and elsewhere, qualifying income levels have been raised to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000.
The maximum purchase price allowed for any house or condo would be $800,000, and only for principal residences, so vacation homes would not qualify.
According to the National Association of Realtors, which has been lobbying for an extension , as many as 400,000 resale transactions (out of 1.2 million homes sold through the program) were completed specifically because of the first-time home buyer tax credit, thereby helping to clear up the glut of available properties. Supporters believe the benefits of extending and expanding the tax credit will outweigh the cost, which could amount to as much as $10.8 billion in lost taxes.
According to U.S. Treasury statistics released in October, about $8.5 billion in refunds have already been claimed for new and resale homes. Provisions to curb fraud were added to the extension of the homebuyer tax credit after the Internal Revenue Service identified 167 suspected criminal schemes and began examining more than 100,000 potential civil violations of the program.
Chicago Condos
Home ownership on any level is wonderful. Nothing gives you a sense of pride like owning your own place and if you live in the Midwest there is nothing quite like Chicago condos in which to live. Condo ownership has some very distinct advantages versus a single family home. Let's say you really hate to mow the lawn, trim and pull weeds, then condo living is where you want to be. Maybe you travel a lot for your job or have hobbies that you want to pursue then, condo real estate is what you need. You love to sit around the pool but can't afford one. You have few friends and you want to meet new people. You would really like a large home in a gated community with rules and regulations but can't afford it. Last but not least, there are some great deals in today's market interest rates are lower than they have been in years. All of these things and more are an excellent reason to buy a condo.
One area that you need to investigate before you buy a Chicago condo is the prices of similar properties that have sold in the complex or complexes in the immediate area. Condo sales in the area can tell you if the price you are offering is too high or too low. A comparative analysis will also tell you how long units in that complex have been on the market, if prices have been reduced, how many units are for sale, and the prices in which they sold. With the ever changing real estate market it is important to be aware of all of these things to get the best value for your money.
There are so many areas in which to buy Chicago condos that it is sometimes difficult to choose. With over 77 acknowledged neighborhoods almost any style of living is available and at almost any price. Chicago has everything from lakeshore upscale condos and townhouses to lofts in the south loop. If your tastes run more to suburban areas, Chicago offers a variety sizes and styles near the main transportation arteries whether it is the expressways to bus routes to train stations. Everything is in reach in a city with the diversity of cultures like no other city in the country. So remember when looking to find your first home or looking to downsize there is no place like Chicago.
Homebuyer Tax Credit
The program today is called the American Recovery and Reinvestment Act of 2009 and authorizes up to $8,000 tax credit for first-time home buyers purchasing a principal residence. Many people have questions about the homebuyer tax credit and below are some of the answers for our buyers. Remember you should consult a qualified tax advisor or legal professional about your unique situation.
As the program now stands, which is scheduled to end on December 1, 2009, first time homebuyers purchasing any kind of home - new or resale - are eligible for the homebuyer tax credit. The definition of a first time home or condo buyer is as follows; a buyer who has not owned a principal residence during the three year period prior to the purchase. For married buyers the test is of both home buyer and his/her spouse. This year's tax credit is different from last year's because it does not have to be paid back. This year's tax credit is a true credit, not an interest free loan. However, the home buyer must use the residence as their principal residence for at least three years or possibly face a recapture of the tax credit amount. Claiming the tax credit has also been made easier. All you have to do is complete the tax credit on IRS form 5405 to determine the amount and then claim the amount on line 69 of your 1040 income tax return. No other applications and forms are needed. This is what is now available but Congress is on the verge of modifying and extending the program to include more potential homeowners who can take advantage of the credit. The latest idea under consideration is a credit of $6,500 for homeowners looking to trade up to a bigger primary residence and who have already lived in their current home for five years. To qualify for the full credit homebuyers must have adjusted gross income of less than $125,000 or $225,000 for married couples filing jointly. The homebuyer tax credit will only apply to homes sold for $800,000 or less and contracts to buy a home must be signed by April 30, 2010 and must close by June 30, 2010.
Support of the changes is bipartisan which gives an extension a much better chance than ever before. Supporters maintain the current credit has helped boost existing home sales and more is needed going into 2010 to stabilize prices and generate jobs in a year when a rise in foreclosures is expected.
Is the Homebuyer Tax Credit Working?
Housing Tax Credit Working
Consumers are just starting to see a ray of hope for the housing market and the overall economy because of the Homebuyer Tax Credit. The housing market has been on the rise and numbers have been increasing for the last seven months. Although it is on the rise, it is up to Congress to make that hope, a reality by building on the momentum that was created by the $8000 home buyer tax credit. There are many ways that Congress can build the momentum and keep the housing market on the upswing.
One way to build momentum is for Congress to extend the home buyer tax credit. Home sales have jumped in recent months and the housing inventory has improved. This has resulted in a stabilization of home prices. Why not keep a good thing going.? If it’s not broke, then don’t fix it! If they stop this homebuyer tax credit too quickly, in other words before the economy turns around, then the economy could end up worse then it started and on top of it be way more in debt.
Now is the time to build on home sales and expand it to all home buyers. Prices are low and it is a great time to buy, especially with the Homebuyer Tax Credit that is slated to expire November 30th. However, this cannot help new purchasers now who write a contract today, because they won’t be able to close before the deadline. Without Congress acting now, the market and our national economy may freeze again, possibly as soon as this month.
There are a number of other actions that can strengthen the economy as well. First of all, make the FHA and Fannie May/Freddie Mac loan limits permanent, those programs are set to expire at the end of the year. Maintaining current loan limits would ensure that families would have access to low cost financing and also refinance problematic loans into safer, more affordable mortgages.
Also Congress should continue to aid in the secondary mortgage market. Without this help, market participants will have no incentive to reach out to lower incomes consumers who have great credit. They need the federal government involvement in the secondary mortgage market. We must ensure that the housing markets works in all aspects of the market at all times and the mortgage capital is provided to all qualified and potential purchasers in a way that promotes sustainable homeownership. It is time to end this downturn and finally recover from all the damage done!
Real Estate Market in Chicago
The real estate market in Chicago is poised to take off due to the economic policies our government has put in place to encourage home or condo ownership. Congress passed an $8000 non-repayable tax credit this year which will give Chicago a shot in the arm in housing activity. The credit is available to anyone who has not owned a primary residence during the past three years and is equal to 10 per cent of the home's purchase price up to a maximum of $8000. It is the perfect incentive for first time homebuyers who are interested in owning their own home or condo in an exciting city as Chicago. There is even now talk the program will be extended and not only to first time buyers but others as well.
Historically, the real estate market in Chicago has been volatile with its many well known developers, political movers and shakers and just the attitude of its residents. Chicago is such a mix of cultures and nationalities with over 77 different neighborhoods that condo buyers have a variety of choices from the more upscale Gold Coast to the excitement of Wrigleyville. There is no place like the city of Chicago and all it has to offer from the dozens of museums to professional sports for those who want to live in one of the most exciting cities in the world.
The Chicago real estate market is improving due to the current rental market. The media has sensationalized the troubles in the real estate market regarding the difficulties in getting financing to purchase a home or condo which has encouraged landlords to increase their rents year after year believing the market is glutted with renters. Nothing could be further from the truth. With the advent of rent to own programs and the $8000 tax credit more and more potential first time home buyers are entering the market. There is no question even in today's real estate market that owning a property is a much better alternative if you intend on staying for at least 4 or more years.
Recently the Chicago Tribune reported new housing and condo developments have undergone a record seven month decline, which may be the reason the real estate market in Chicago is somewhat stable. The lack of new developments has helped to slow a glut in the housing and condo markets for Chicago and we are beginning to see prices stabilize. I am hearing from many potential condo buyers that they expected a big collapse in prices so they could pick up a condo cheap but they now think that collapse may never happen. We could very well be at the bottom of the housing market which means there is no way to go but up encouraging buyers to get in the market for those great deals before they are all gone.
Should I buy now?
All we hear right now is about unemployment, health care reform and bailouts. That doesn't mean there has not been talk of the real estate market and what is happening in that part of the economy. What I am hearing a lot about is should I buy now or wait for the market to bottom out? Depending on who you listen to the market may or may not be at its bottom and who in all reality can forecast it. Many of those so-called forecasters were the ones that missed all aspects of the economy as it was tumbling downward. And down is not always a bad place to be since the only other way is up. Whether we are at the bottom, close to the bottom or on our way up it is a good time to buy your home or condo.
Should I buy now? Absolutely, and let me tell you several factors that are in your favor by acting now and not trying to guess at a target that may always keep moving.
We have a tax credit! Let me say that again since you probably did not get the full impact of what that statement means in today's economic climate. A tax credit means you do not have to pay it back. That's right, it is free money and when is the last time you received free money. It is not as perfect as it could be because there are several requirements but all in all they are not that difficult. First, you must be a first time home buyer or not owned your principle residence in the last three years. Second, if you are single your income cannot exceed $75,000 per year and married couple's income cannot exceed $150,000 per year. The last part might be a little trickier since the tax credit is only if you close your home or condo on or before November 30, 2009. That is less than 45 days away and if you don't get moving now you are not going to make the deadline.
Another reason to ask yourself if I should buy now is interest rates are lower than they have been in years. Do you realize that you can get a 30 fixed rate for less than 6% from many lenders. That means you can afford more home or if you want you can buy a more reasonably priced home and keep the payments low, maybe even less than you are paying in rent. Would you have imagined several years ago that you could get free money and a great interest rate on buying a home? If you are like most of us you would have laughed us out of the place, but it is happening now. We would never have guessed it just like we are never going to guess the bottom of the housing market. So just do it!
Homebuyer Tax Credit
If you will remember back in 2008 then President Bush signed a Homebuyer Tax Credit that was to stimulate home buying going into 2009. The Housing and Economic Recovery Act of 2008 authorized a $7,500.00 tax credit for qualified first-time home buyers purchasing homes on or after April 2008 and before January 1, 2009. The program has since expired but has been replaced with a much better and larger plan.
The Homebuyer Tax Credit offered today is as follows but changes may be on the way:
- The tax credit is for first-time home buyers only.
- The tax credit does not have to be repaid.
- The tax credit is equal to 10 per cent of the home's purchase price up to a maximum of $8,000.00.
- The credit is available for homes purchased on or after January 1, 2009 and before November 30, 2009.
- Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.
The program today is called the American Recovery and Reinvestment Act of 2009 and authorizes up to $8,000 tax credit for first-time home buyers purchasing a principal residence. Many people have questions about the program and below are some of the answers for our buyers. Remember you should consult a qualified tax advisor or legal professional about your unique situation.
First time homebuyers purchasing any kind of home - new or resale - are eligible for the tax credit. The definition of a first time home or condo buyer is as follows; a buyer who has not owned a principal residence during the three year period prior to the purchase. For married buyers the test is of both home buyer and his/her spouse. This year's tax credit is different from last year's because it does not have to be paid back. This year's tax credit is a true credit, not an interest free loan as was last year. However, the home buyer must use the residence as their principal residence for at least three years or possibly face a recapture of the tax credit amount. Claiming the tax credit has also been made easier. All you have to do is complete the tax credit on IRS form 5405 to determine the amount and then claim the amount on line 69 of your 1040 income tax return. No other applications and forms are needed.
Recently Congress passed a bill extending the Home buyer Tax Credit past the November 30 date for military, diplomatic and intelligence personnel serving overseas. The extension of this House bill paves the way for the continued tax credit and word is, offering an expansion of the entire program including offering the credit to a broader group of buyers, such as replacement home buyers whose income does not exceed some limit. Hopefully we will have word of the possible extension in the next few weeks but if you are interested in purchasing and meet the guidelines of the original program don't hesitate to act now. You never know what Congress may do and you would not want to miss out on this opportunity.
Chicago Condo Properties
Home ownership on any level is wonderful. Nothing gives you a sense of pride like owning your own place and if you live in the Midwest there is nothing quite like Chicago condo properties in which to live. Condo ownership has some very distinct advantages versus a single family home. Let's say you really hate to mow the lawn, trim and pull weeds, then condo living is where you want to be. Maybe you travel a lot for your job or have hobbies that you want to pursue then, condo real estate is what you need. You love to sit around the pool but can't afford one. You have few friends and you want to meet new people. You would really like a large home in a gated community with rules and regulations but can't afford it. Last but not least, there are some great deals in today's market interest rates are lower than they have been in years. All of these things and more are an excellent reason to buy a condo.
Chicago condo properties have become more and more like their own communities. Today tight knit groups of friends have evolved due to the condo living lifestyle. A close group of friends creates a sense of security knowing you will always have good friends around to help no matter the situation. This sense of community offers frequent social events to take place at the pool or clubhouse which offers many different types of social activities with the total cost spread around rather than paid by a single homeowner.
Condos are king in Chicago when it comes to residential real estate. When it comes time to Chicago condo properties, there are many areas in which to choose. Chicago is certainly known for its downtown skyscrapers but there are numerous other areas that have their own flavor which offers some of the best values in residential real estate. One definite advantage in the Chicago real estate market when buying a condo is that prices are holding steady and there are numerous developments currently underway or proposed for this year. Construction crews are putting up new buildings and older places are being refurbishing to create condos and lofts. It is estimated that over 4000 units will be built in Chicago in 2009 which puts buyers in a great position to get what they want for a good deal.
There are many Chicago condos for sale in a variety of communities and neighborhoods. Chicago is known for its ethnic groups and communities where condos are being built or re-furbished in almost all of these areas. If you are looking for a different lifestyle in a vibrant community atmosphere there is no better place to look than Chicago!
