On July 30th, President Bush signed into law a one of the largest packages of housing legislation passed by Congress in a number of years. In addition to providing foreclosure and property tax relief to current home owners, the legislation includes provisions that will allow for refinancing of subprime mortgages, greater regulation and funding for Fannie Mae and Freddie Mac, and grant money for local governments to rehabilitate distressed properties. Most notably, however, is a provision that will provide a $7,500 tax credit to new home buyers.
WHO IS ELIGIBLE FOR THE $7,500 HOUSING TAX CREDIT?
This provision of the Housing Bill is commonly referred to as a tax credit for “first-time home buyers.” But in reality, any buyer that has not owned a home for three years or longer is eligible for the tax credit. For married couples, neither person may have owned their principal residence within the last three years.
WHAT ARE THE INCOME LIMITS?
The federal housing tax credit is not targeted strictly at low income home buyers. In fact, the adjusted gross income limit is $75,000 for singles and $150,000 for married couples who file jointly. Additionally, a partial credit is still available for people with incomes that exceed the AGI limits. For singles who make up to $95,000 per year or married couples with a combined income of up to $170,000, there is still an opportunity to receive a tax credit on your new home purchase.
HOW LONG WILL THE CREDIT BE AVAILABLE?
The housing tax credit is available to home owners who purchase and close on their new home between April 9th, 2008 and July 1st, 2009. This will surely come as welcome news to first-time buyers who recently purchased a new home without any expectation of receiving a tax credit. Likewise, people who have been on the fence about whether or not to buy now have yet another reason to take advantage of the great market conditions that exist for new buyers. In addition to the new $7,500 housing tax credit, interest rates remain near historically low levels, an abundance of new home inventory is available, and new homes continue to be a great long-term investment. Taking all this into consideration, there has never been a better time to buy a new home than right now.
Although the southern Wisconsin housing market has experienced a slow down during the past 24 months, the effects have been only minor when compared with some of the harder hit markets in the U.S. – or even other Midwestern states such as Indiana, Michigan, and Minnesota. The demand for new single-family homes in southern Wisconsin has remained steady and you can bet that the new housing tax credit will help many more people realize their dream of owning a new home.
For more information on the federal housing tax credit, please visit www.federalhousingtaxcredit.com
To begin searching for a new home in Wisconsin or to learn about Brookstone Homes, please visit www.brookstonehomes.com
