New $7,500 tax credit for first-time buyers | SummitDaily.com
YOUR AD HERE »

New $7,500 tax credit for first-time buyers

ALLISON SIMSON AND JOYCE NENNINGER

Question: Allison, what is the scoop on the new Housing Recovery Act?Answer: The Housing and Economic Recovery Act of 2008 was just signed by President Bush with some amazing benefits for first time homebuyers. Call everyone you know who wants to buy their first home (or who hasnt owned one in three years), this is too good to miss its a $7,500 tax credit (not deduction but a credit).If you have not owned a home in three years, you are a first time home buyer. If you buy a home after April 9, 2008 and before July 1, 2009, you qualify for a credit. Call your friends who just bought a home since April 9th and tell them they may take $7,500 off their tax bill if they qualify. It has to be your principal residence, so rentals do not count. The tax credit is 10% of the cost of the home, up to a maximum of $7,500. So, if the home costs $100,000, you would get a credit of $7,500. This is not an additional deduction that lowers the amount of income to be taxed, it is a tax credit. In other words, you take $7,500 off your tax bill. What if your tax bill is only $5,000? The IRS will send you the additional $2,500 as a refund. When was the last time the IRS sent you a refund because you bought something?The credit is actually a loan which has no interest, and will be paid back over 15 years. You get the credit on your 2008 taxes, but you start paying it back on your 2010 taxes that are due in 2011, so you get at least two years without a payment. You pay back 6.67% of the credit each year, so for a $7,500 credit the payment is $502.50 per year. If you stay put for 15 years, you pay it off with no interest.What happens if you sell the house? You pay the balance back at the closing. So, you get $7,500 now, and pay the rest of it back if you make money on the sale of your house.What happens if you do not make enough money when you sell your house? They forgive the rest of the debt. In other words, get $7,500 now and pay back nothing if your house only breaks even, or loses money, at closing. When was the last time you got a loan on a speculative venture where the person who gave you the loan forgave the rest of the loan if you did not make enough profit on the sale? The risk of loss in buying now is on the government. In other parts of the country where real estate is going down in value, you can lose 10% of the value of the home (up to $7,500) and the loss is covered by the fact that you do not pay back the tax credit. The Portland real estate that first time buyers can afford is going up in value, so we are not as worried about the risk of loss. In fact we have been involved in many homes with multiple offers due to this program. Similarly, if you die before repaying the debt, it is forgiven. There are special rules for sales as a result of divorce or if the government takes your property by condemnation.There are restrictions on the amount of income that you can make and still get the credit. But the restriction is $75,000 per year for a single person and $150,000 for a couple filing jointly, so the vast majority of people qualify. If you make more than that, you can still get some of the tax credit, but there are complicated rules about phasing out the credit as the income goes up. If you make that much money, you can afford to hire someone to figure out the formula.There are minimal restrictions on the financing. If you use a loan that is supported by mortgage revenue bonds, you do not get the tax credit. These loans are normally made by the Oregon bond program, but there are not many of them available, and the qualifications limit their use. In other words, nearly every loan allows you to get the tax credit. What is the catch? You have to buy your first house in three years before July 1, 2009, not have super high income, not use bond financing and buy anywhere in the US.If you know someone who wants to buy a home, call them. If they want to buy in the Summit County area, have them call us and we will take exceptional care of them. If they want to buy anywhere in the US, call us and we will find them an exceptional agent anywhere in the US. The government gives tax credits to huge companies, here is one for the little guy. Dont miss it. Top kitchen design trendsQuestion: We are considering remodeling our kitchen and wonder what we can do that we will love now, and that will help the home sell in the not so distant future. Any suggestions? Answer: Incorporating current trends into your kitchen design not only helps you create a stylish and updated room, but also increases functionality. From the latest colors to the newest materials, good design can ensure you enjoy your new kitchen. A recent national survey of kitchen designers conducted by the National Kitchen & Bath Association (NKBA) and luxury appliance manufacturer Thermador identifies several trends influencing todays kitchen design from popular colors and finishes, to new materials, and even new technologies being incorporated by designers. Style and color More than half (56.8 percent) of the kitchen designers surveyed said traditional was their most often requested type of kitchen design. However, designers identified contemporary and clean, simple lines as kitchen design trends to watch for. For cabinetry, the top two most used finishes in kitchens are cherry and maple, while paints and exotic woods tied for third. This is a departure from the once-dominant oak cabinetry. Moreover, designers identify stainless steel as the top color scheme in todays kitchen designs, followed by beige and bone colors. Appliances Stainless steel continues to lead the way as the most popular finish for appliances. However, appliances with custom paneling to match cabinetry are more commonly incorporated into todays kitchen designs. The appliances that most often receive paneling are dishwashers and refrigerators. Designers identified modular refrigeration, along with induction cooktops and speed-cooking ovens as one of the most exciting kitchen technologies. Modular refrigeration like the Thermador Freedom Collection is gaining popularity because it provides designers and their clients greater flexibility, says Michael Traub, president and CEO of Thermador. With Freedom, they are liberated from having to design the entire kitchen around traditional and bulky refrigerator/freezer combinations while being able to achieve truly flush integration with cabinets. Countertops and backsplashes The countertop material used most frequently is granite, and with unlimited stone colors and designs, its highly customizable. However, another stone material — quartzite, noted for its durability — comes in a strong second. Additionally, the top three backsplash materials are tile, followed by granite and glass. Functionality and layout Todays households often function with more than one cook, so kitchen designs frequently incorporate multiple cooking stations such as a range and a wall oven, or a range and a cooktop. Appliances are also occupying islands to add cooking space. Additionally, prep sinks are showing up on islands or other locations in the kitchen for increased functionality. Kitchens are more commonly becoming a households hub, says Ed Pell, manager of marketing research at the NKBA. With multiple cooks working in the kitchen, and more entertaining and family activities conducted there, designers want to fulfill their clients desire for increased functionality with efficient work areas. Consumer attitudes When it comes to appliances, designers indicate that homeowners believe high-end options are a good home investment. In fact, designers say premium appliances are the top dream item amongst their clients — winning over custom cabinetry and special countertops. Upcoming trends When designers were asked to name new trends to take note of, many identified new color applications. Specifically, greater use of color in cabinets was cited as an up and coming trend, as was the use of two colored cabinetry and molding, and the overall bolder use of color. (ARA)For answers to your real-estate questions, call Allison at (970) 468-6800. E-mail Info@SummitRealEstate.com. Allison is a longtime local in Summit County. Summit Real Estate The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allisons longtime residency and years of real estate experience can help you make the most of any buying or selling situation. Shes a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field. Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours. Want to know the value of your Summit County property? Visit http://www.SummitHomeValue.com


Support Local Journalism

Support Local Journalism

As a Summit Daily News reader, you make our work possible.

Now more than ever, your financial support is critical to help us keep our communities informed about the evolving coronavirus pandemic and the impact it is having on our residents and businesses. Every contribution, no matter the size, will make a difference.

Your donation will be used exclusively to support quality, local journalism.

For tax deductible donations, click here.
 

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.

User Legend: iconModerator iconTrusted User