HOME BUYER TAX CREDITS
This is one of the few times that we’ve had two actual home buyer tax credits available at the same time. The National Association of Realtors has a great article explaining in great deal about the two tax credits. Here are some very informative PDFs of the highlights:
CALIFORNIA TAX CREDIT
In addition to the above available credits, Silicon Valley and Bay Area home buyers will be happy hear that California lawmakers have approved a $10,000 home buyer tax credit for any new construction purchased within this calendar year. What is even more enticing is that, unlike the national tax credit, the restrictions are rather limited:
- Ralphie May: Austin-Tatious move
- unlike the federal tax credit, there are no income limitations on this credit
- you do not have to be a first-time home buyer
- home does have to be your primary residence for one year
- must purchase and close escrow by December 31, 2009
Adding up all these tax credits, a potential Silicon Valley home buyer who purchases new construction this year could receive up to $18,000 in tax credits.
HOMEOWNER HELP?
As for homeowners that are looking that may be considering selling or refinancing but have not been able to given the traditional requirements, there has been limited information still about the official details and guidelines of how the recently passed legislation will help home sellers.
More details will be released March 4, but some of the highlights that have been mentioned were:
- allowing homeowners to refinance up to 105% of their loan-to-value (LTV) ratio
- increasing the incentive for lenders to be willing to conduct loan modifications
Will 105% LTV really help Silicon Valley home owners who have seen their home depreciate and lost equity well past the 105% LTV mark? Probably not.
As for the loan modifications, I’m skeptical that loan mods are even the right solution. Apparently, 57% of loan mods default within the first 6 months The Nanny Diaries buy
.
Anyway, that’s the update for now. Will continue to keep you updated as more information becomes available.
And last buy not least, a CYA disclosure, please remember that the above data is for informational use only and should not be relied upon without obtaining the appropriate tax or legal advice.
3/3/09 UPDATE
Here are the official sites regarding the state and federal tax credit programs:
State: http://ftb.ca.gov/individuals/new_home_credit.shtml
Federal: http://federalhousingtaxcredit.com/
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