Austin Texas Homes

The new Housing Bill is over 700 pages long and not written for the faint of heart. To determine what tax credits are most advantageous for you, please be sure to obtain counsel from a professional tax consultant or accountant.

There have been some tax credit additions, increases and streamlining to tax programs already in existence. Many of the tax credit incentives are temporary and will end with the year 2009. There are some new tax advantages for those who desire to invest in the residential real estate market but, remember, there are time limits involved.

Real estate investors will see a temporary increase in the tax credit limitations for the low-income housing tax credit program. Limits are set state-by-state and Tax credits have defined time lines.

The Housing Bill has also changed the way Capital Gains are calculated and how the tax credit is applied. If you are a move-up buyer, be sure to check with a professional as to how this change would affect you.

The Housing Bill offers tax credits to first time home-buyers, defined as anyone that has not owned a home in the past three years. The tax credit is a loan of sorts since it must be paid back over the next 15 years but it is an interest free. Repayment begins in 2010 in $500 increments.  These payments are in the form of a “recapture tax credit”.

The tax credit for first time home-buyers is not a flat credit of $7,500 for all buyers during the qualifying period. It is 10% of the home’s purchase price with a cap of $7,500.

The tax credit was designed to stimulate home sales and to aid first time home buyers. However, it is a tax credit to be taken when you file taxes after the purchase of a home. The home must be purchased after April 9, 2008 and before June 30, 2009. At this time, there is no up front money to help you purchase a home.

It is important for first time buyers, move-up buyers and investors to understand all the advantages of the new Housing Bill. The leaders of the nation designed the bill to stimulate the housing market. There are advantages to tax credits.  However, finances are like real estate; very personal and no two circumstances (homes) are exactly alike. Be sure to consult a professional in the field of accounting and/or taxes.