Archive for the ‘Tax Credit’ Category

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Home Buyer Tax Credit Extended for Service Members

Tuesday, April 27th, 2010

The National Association of Home Builders (NAHB) wants members of the military, foreign service and intelligence communities to know that they may have an additional year to buy a home and claim the home buyer tax credit, which expires for most Americans on April 30.

The law provides qualified service members who served on official extended duty outside of the United States for 90 days or more at any time between Jan. 1, 2009, to April 30, 2010, another year to buy a home and claim the credit. They have until April 30, 2011, to sign a sales contract, and until June 30, 2011, to settle and close on the home. Both the $8,000 first-time and $6,500 repeat home buyer tax credits are included in the rule.

“Congress recognized that many service members may have missed out on the home buyer tax credit due to being posted overseas,” said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. “It is only fitting that they be given another year to take advantage of this opportunity in appreciation of the sacrifices they have made serving our country.”

“Qualified service members” are defined as a member of the uniformed services of the United States military, a member of the Foreign Service of the United States, or an employee of the intelligence community.

The rule that requires buyers to repay the credit if they move out of their home within three years has also been waived for qualified service members if they have to sell their home due to receiving government orders for extended duty service.

NAHB provides information on the home buyer tax credit, including eligibility requirements and links to home buying resources, on its consumer website www.FederalHousingTaxCredit.com.

Posted in Home Economics, Housing Economics, Loans and Closings, Tax Credit | No Comments »

Weather Disrupts the Housing Numbers

Friday, April 9th, 2010

Check out the latest from the respected Economists of the National Association of Home Builders.

The Weather Disrupts the Housing Numbers

As feared, the February housing numbers were not good. Given the unusually bad weather in the South and along the East Coast that month — with record setting snow storms in the Mid-Atlantic region and up into New England — the expectation was that many of the economic statistics would be bad, even on a seasonally adjusted basis, and they were. (more)

House Price Stability?

House price measures have been sending off mixed signals recently. However, the consensus is that the worst is over, with small price vacillations up and down for some time to come.

At a minimum, housing prices have been falling at a much slower pace, and they have stabilized in many markets. As of January, the S&P/Case-Shiller seasonally adjusted 10-city and 20-city price indexes had both risen for eight consecutive months. (more)

Minimal Pressure on Consumer Prices

Consumer prices as measured by the Consumer Price Index (CPI) remained tame in February, rising 2.1% on a year-over-year basis, down from 2.7% in December 2009. Core inflation — excluding food and energy — rose 1.3% on a year-over-year basis, down from 1.8% as recently as December 2009. This gives the Federal Reserve room to continue its current expansionary monetary policy to aid the economy in its recovery from the Great Recession.

Building material prices, which generally fell during much of the housing recession, are now showing signs of rising. Although price increases to date have been relatively modest overall, the cost of some materials has jumped considerably — including lumber, energy and copper. (more)

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Green Features are Undervalued by Appraisers and Banks

Friday, April 9th, 2010

Home builders are complaining that the appraisers and lenders aren’t willing to recognize the value of green building features.

“What we’re finding is that the appraisal process, the lending process, the underwriting process for loans still hasn’t caught up with the market interest in green building,” says Kevin Morrow, senior program manager for the National Association of Home Builders’ green programs.

“Technological advances have radically changed — and are radically changing — the way we build houses. The banking and mortgage industries need to be educated,” says Mark Nuzzolo, owner of Brookside Development in Woodbridge, Conn.

Source: The Christian Science Monitor, Alexandra Marks (04/07/2010)

Posted in Green Building, Home Economics, Home Features, Housing Economics, Tax Credit | No Comments »

Top Questions Home Buyers Have About the Tax Credit

Monday, March 29th, 2010

March 25, 2010 – As the April 15 deadline to file 2009 federal tax returns approaches, the National Association of Home Builders (NAHB) is providing answers to some of the questions home buyers are most frequently asking about the home buyer tax credit.

“NAHB’s Web site that provides information about the home buyer tax credit, www.FederalHousingTaxCredit.com, has received more than 8 million visits,” said NAHB Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. “We are doing everything we can to make sure home buyers are informed about this outstanding opportunity to benefit from buying a home before it expires April 30.”

Some of the more commonly-asked questions, and the answers, include:

How does a home buyer claim the tax credit?

The credit is claimed when the home buyer files or amends their federal income taxes. For qualifying homes purchased in 2009 or 2010, the taxpayer must complete IRS Form 5405 and attach a copy of the settlement statement. In most cases, the settlement statement is a properly executed Form HUD-1.

In circumstances where a HUD-1 is not provided, such as purchasing a mobile home or a newly constructed home, the IRS will accept an executed retail sales contract (mobile homes) or a copy of the certificate of occupancy (new homes).

Does the home buyer have to sell their current home in order to qualify for the $6,500 repeat home buyer tax credit?

A home buyer does not need to sell their current home in order to be eligible for the repeat buyer credit. They can continue to own both homes, and rent or use their former home for something else, as long as it no longer serves as their principal residence. The taxpayer is required to use the new home as their principal residence, and live in it for at least 36 months, or they will have to repay the credit.

Do married couples both have to meet the eligibility requirements in order to claim the credit, even if they file taxes separately?

Both spouses must fully meet all the eligibility requirements for either the $8,000 first-time home buyer tax credit or the $6,500 repeat buyer tax credit, regardless of if they file joint or separate tax returns. However, if an unmarried couple purchases a home and only one person qualifies, the eligible person may claim the full credit.

Do all home purchases need to be completed by April 30, 2010, in order to be eligible for the credit?

There are two exceptions to the April 30 deadline. If the buyer enters into a binding contract by the deadline, they have until June 30, 2010, to complete the purchase. The deadline has been extended a year, to April 30, 2011, for members of the uniformed services, Foreign Service or employees of the intelligence community who have been on qualified extended duty outside the United States for at least 90 days between January 1, 2009, and April 30, 2010.

NAHB’s Web site www.FederalHousingTaxCredit.com provides information including eligibility requirements for the $8,000 first-time home buyer and $6,500 repeat buyer tax credits, detailed question and answer sections, and links to additional home-buying resources for consumers.

Disclaimer: NAHB is providing this information for general guidance only. This information does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information in this release is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

Posted in Tax Credit, Uncategorized | No Comments »

Super Open House Weekend

Thursday, March 11th, 2010

Visit open houses all around Greater Cincinnati including our FOUR. Time is running out to take advantage of the Federal and Kentucky tax credits. See you at one of our open houses.

8424 Stratford CT: resale in Florence for $169,900

3943 Buckhill DR: Model Home in Erlanger for $315,000

988 Aristides DR: Model Home in Triple Crown for $346,000

1177 Appomattox DR: Model Home in Florence for $410,000

Posted in Home Economics, Housing Economics, Locations, Tax Credit | No Comments »

HOMESTAR: Cash for Caulkers

Thursday, March 4th, 2010

WASHINGTON–In his State of the Union address, the President called on Congress to pass a program of incentives for homeowners who make energy efficiency investments in their homes. Today, while touring a training facility at Savannah Technical College, the President outlined more details of a new “HOMESTAR” program that would help create jobs by encouraging American families to invest in energy saving home improvements. Consistent with the President’s call for a HOMESTAR program, the Senate Democratic leadership included a proposal of this kind as part of their Jobs Agenda released on February 4, 2010. The President looks forward to continuing to work with Members of Congress, business, environmental and labor leaders to enact a HOMESTAR program into law. (more)

Posted in Home Economics, Home Features, Home Maintenance, Tax Credit | No Comments »

Buyers Who Wait May Lose a Lot

Tuesday, March 2nd, 2010

Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).

Source: Money Magazine, Beth Braverman (03/02/2010

Posted in Home Economics, Housing Economics, Loans and Closings, Tax Credit | No Comments »

IRS Clarifies What’s Needed to Claim Tax Credit

Sunday, February 28th, 2010

The Internal Revenue Service has clarified which documentation taxpayers need to submit to claim the first-time and move-up homebuyer tax credit.

While the IRS is still requiring the filing of Form 5405, it is not demanding that all parties’ signatures be on the HUD-1 settlement document in areas where requiring both the buyer and the seller to sign the document isn’t common.

The IRS clarification says: “In areas where signatures are not required on the settlement document, the IRS has clarified that it will accept a settlement statement if it is completed and valid according to local law. … The IRS encourages those buyers to sign the settlement statement prior to attaching it to the tax return.”

For repeat buyers, the IRS is seeking documentation that home buyers have lived in the previous property for a consecutive five of the past eight years. Proof can include property tax records, home owner insurance records, or mortgage interest statements.

Source: Washington Post (02/20/2010)

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Cash for Caulkers: Appealing to Home Shoppers

Sunday, February 14th, 2010

Congress is about to approve a program to put contractors back to work doing energy retrofits.

If “Cash for Caulkers” passes, home owners will be eligible for a tax credit worth up to $12,000 or half the cost of the retrofits, whichever is lower.

A home owner who spends $24,000 to cut his energy use in half will save an average of $100 per month, estimates Lane Burt, manager of building energy policy at the Natural Resources Defense Council. With a $12,000 tax rebate from the government, the payback will take 10 years.

Some real estate practitioners pointed out that energy retrofits might be a hard sell because they don’t raise a home’s sale value. “It sounds good on paper, but it’s just not how the American consumer makes choices,” says Jeff Geoghan, a Coldwell Banker REALTOR® in Lancaster, Pa. “If you’re buying a house, and you see a furnace has a 95 percent efficiency rating, are you really going to make your decision based on that?”

Source: CNNMoney.com, Steve Hargreaves (02/04/2010

Posted in Home Maintenance, Tax Credit | No Comments »

Important IRS Updates for Claiming the Homebuyer Tax Credits

Sunday, February 7th, 2010

Important IRS updates on claiming the home buyer tax credit have recently been announced, and you may want to alert your potential customers. The agency has published an updated version of Form 5405 as well as instructions for home buyers using it to claim the $8,000 first-time buyer credit as well as repeat buyers seeking to claim the $6,500 credit. Updates to the form include the extended purchase date window (tax credit-qualified homes must be under contract prior to May 1 and close before July 1). And yes, even though the revised Form 5405 still references the “First-Time Homebuyer Tax Credit,” it is also intended to be used by repeat home buyers, who must have lived in a single principal residence for five of the last eight years prior to purchasing their new home for which they plan to claim the tax credit.

Beyond these updates, the IRS is also requiring additional documentation for home buyers who claim the credit for purchases after Nov. 6, 2009. Buyers must now provide a copy of the HUD-1 form or, in cases where that form is not used, a certificate of occupancy for a newly constructed home. For purchases taking place after April 30, a copy of the signed sales contract must also be supplied. Meanwhile, in order to claim the $6,500 repeat buyer tax credit, home buyers must attach one of the following for five consecutive years of the last eight to demonstrate that they meet the repeat buyer qualifications: a Form 1098 reporting mortgage interest; a property tax statement; or home insurance records.

Tax credit buyers should also know that, due to the new documentation requirements, those claiming either the $8,000 first-time home buyer credit or the $6,500 repeat-buyer credit cannot e-file. As a result, taxpayers should be prepared to wait at least 12 to 16 weeks to receive their refunds. On a final note, NAHB has recommended options to Treasury and IRS officials for homebuyers who do not use a HUD-1 form and whose local jurisdiction does not issue a certificate of occupancy. We are awaiting their response at this time. Get more information on NAHB’s consumer tax credit Web site at: www.federalhousingtaxcredit.com.

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