Filed under: Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Uncategorized | Tags: existing homeowners tax credit, first time home buyers tax credit, tax credit expiration, tax credit extension, tax credit limits
The First Time Home Buyers Tax Credit has been extended and expanded. Previously, the First Time Home Buyers Tax Credit was only available for first time home buyers (those buyers who had not owned a home in the three years previous to the current purchase) and was only available on homes that closed escrow before December 1, 2009. However, President Obama signed an extension on this deadline to apply to any homes purchased from November 6, 2009 to May 1, 2010 and allowed all homes that have a binding sales contract signed by April 30, 2010 to qualify for the up to $8000 tax credit (based on purchase price of home), not just those homes that closed escrow. In addition to the extension, existing homeowners may be eligible for up to a $6500 tax credit providing that they have used their current home as their primary residence for at least five consecutive years of the last eight years, meet the income requirements and are purchasing a new primary residence. Vacation homes and income properties don’t apply.
Requirements and Limits:
- First time homebuyers who haven’t owned a primary residence in the last three years. Existing homeowners who have used their current home as their primary residence for at least five consecutive years of the last eight years.
- For single or head-of-household tax filers, the limit for their modified adjusted gross income is less than $125,000. For married couples who file a joint return, the limit is less than $225,000.
- For consideration of partial tax credit, single or head-of-household tax filers can earn between $125,000-$145,000. Married couples filing jointly who make between $225,000-$245,000 may also be eligible for a partial tax credit.
- Purchase price of home must be less than $800,000 to qualify and must be the home buyer’s primary residence.
- Tax credit is considered refundable, meaning that if you owe less than the credit amount you qualify for, you will receive a tax refund for the difference of what you owe and the tax credit you are eligible for. For example, if you are eligible for the full $8000 refund and you owe $5000 in taxes, you will receive a refund check for $3000 ($8000 tax credit minus the $5000 you owe).
- You must make the home you purchased your primary residence for three consecutive years to keep the entire tax credit. If you sell the property or stop using it as your primary residence within three years of purchase, you will have to repay the tax credit back to the government.
Remember that the amount of tax credit you are eligible for depends on the purchase price of the home. So, the tax credit you actually receive may be less than the limit. Also, the tax credit is only available on homes used for the home buyers’ primary residence, not to any income or vacation property. If you have any questions about the limits and requirements for the tax credit, please contact me. I’ll be able to help you with all your Austin real estate needs.
Filed under: Austin Texas, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Uncategorized | Tags: 8000 tax credit, 8000 tax credit info, Austin homes for sale, Austin real estate, first time home buyers tax credit, tax credit expiring
Austin buyers have approximately 30 days left to take advantage of the one time $8,000 First-Time Home Buyers Tax Credit. For buyers who will be applying for a loan to puchase a home, the window of opportunity is closing fast. While the tax credit does not officially end until November 30, this leaves only about 30 days to locate a home, open escrow and get loan approval. If there is any delay, you not be able to claim the tax credit.
- Your escrow must close by the end of the business day on November 30!
Anyone who has not owned a home within the past three years may qualify for the tax credit, depending on their income. The income limit for those filing single is $75,000. The income limit for those filing jointly is $150,000. There is a phase-out program for those exceeding the limit. Before counting yourself out, be sure to talk with your tax professional. After adjustments, you could still qualify for a partial tax credit.
The attractive $8,000 First-Time Home Buyers tax credit is not an automatic $8000 tax credit. The limit is $8,000. The actual tax credit you will receive will be 10% of the sales price of the home you purchase.
A tax credit is free money! This is not a tax deduction, but an actual dollar for dollar reduction in the taxes you will owe for 2009. In some cases, the tax credit can be applied to your 2008 taxes.
The tax credit applies only if the home you purchase is your principal residence. The tax credit does not have to be repaid, ever, as long as you live in the property for the first three consecutive years.
It is not often the government is willing to give you money. Don’t let the opportunity pass you by. There is no extention available! Contact me now to help get you into a home before the tax credit expires.
Shay Hargus, Realtor®/Broker for all your Austin real estate needs
Filed under: Austin Texas, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Uncategorized | Tags: Austin, Austin home inventory, Austin home values, Austin homes, Austin homes for sale, Austin real estate
Austin home sales continue their upward trend. The number of homes sold has increased steadily each month since the beginning of the year. We are still below the numbers sold in 2008, but, like the rest of the nation, the Austin real estate market seems to be on the rebound.
The Austin market has been sluggish. However, home prices have held fairly steady. Compared to June of 2008, the median sales price of $199,000 remains the median price in June 2009. Competitively priced homes are still selling in less than 90 days, with many selling within 30 days of entering the market.
Now is an excellent time for buyers to enter the market:
* Interest rates are great
Currently, the interest rate is 5.22%, which is decreased from the interest rates I reported in my June 5th blog. Interest rates rose to a high of 6% in June before they began to go back down. How long will the lower interest rates last? It seems no one really knows for sure. Just be aware that interest rates can rise at any time and quickly, as they did in the month of June.
* Home values remain strong
Austin home values have remained farily stable throughout the national real estate crisis.
* Home inventory remains high
Currently, the Austin area has a large supply of homes on the market, giving buyers a wide selection of homes to chose from in their particular price range. In addition, a large supply of homes keeps Austin home prices competitive and gives the buyer a slight edge when negotiating an offer.
* First-Time Buyers Tax Credit
Anyone who has not owned a home in the past three years is elibigle for a Federal $8,000 Tax Credit. The time to take advantage of the tax credit is quickly running out. The purchased Austin property must close escrow on or before November 30. If you wait too long or the escrow does not close before the deadline, you will lose the tax credit. The tax credit is free money. If you remain in the home for over three years, you do not have to repay it. If you do not need the entire amount of the tax credit, the remainder will be issued
* Austin First-Time Buyers Down Payment Assistance
The City of Austin offers first-time home buyers a zero interest loan up to $10,000 when you live in the home for 10 years. There is also a program which will assist first-time buyers with an interest-free loan up to $40,000 when you live in the home for 30 years.
Filed under: Austin News and Events, Austin Sustainable Living, Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas, Visit Austin | Tags: Austin Homeowners
All good things good to an end it seems. And the low-low 4% interest rates have ended. According to the experts, there is little hope that they will return.
For the past three months interest rates have remained under the 5% mark. Just a few short weeks ago, homeowners seeking a refinance, and buyers could get a mortgage loan with an interest rate around the 4.75% mark. Last week the national average was 4.91%. This week interest rates have shot up to 5.39% (as reported by Freddie Mac)! This is the highest interest increase in six months.
According to Yahoo Real Estate today’s rate is 5.396%. However, according to ReatyTimes.com the average rate is 4.91%. Either way, today’s rates indicate interest rates for home mortgages are on the rise.
Austin homeowners, it is important that you understand how higher interest rates effect you. There are some negatives and a very great positive reaction when interest rates go up.
Negative Reactions:
When interest rates rise, even slightly, less buyers qualify
When interest rates rise, buyers do not buy because of higher mortgage payments, which make renting more affordable
When interest rates rise, a home refinance is less likely to be beneficial
Positive Reaction:
When interest rates rise, home purchase activity goes up because buyers want to buy before the rates increase further
Austin home buyers, it is important that you understand how higher interest rates effect you
A higher interest rate results in a higher mortgage payment
A higher interest rate results in less buying power
A higher interest rate can keep you from qualifying for a mortgage loan
A higher interest rate costs you ten of thousands of dollars (in interest paid) over a long period of time (30-year mortgage)
Austin home buyers if you are considering purchasing a home in 2009, get off the fence. There are great reasons to buy now, including the one time (and for this year only), tax credit. By the way, there have been changes to the tax credit which will allow you to use it as a down payment or to pay closing costs when using FHA financing. I will be posting a blog on the benefits of how buying now can save you a lot of money.
Austin homeowner if you are considering refinancing your home loan, get off the fence. The higher the interest rate the less sense it makes to refinance. I will be posting a blog on the benefits of refinancing in a future blog.
Attention Austin homeowners. I will be posting a blog on the benefits of refinancing. It may not be too late!
Attention Austin buyers, I will be posting a blog on the benefits of how buying now can save you a lot of money.
Filed under: Austin Texas, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice | Tags: broadband access, home buyers, internet, internet access, sellers
The Internet has greatly impacted the real estate arena. The Internet is now influencing home buyers in a new way - Internet access.
Location has always been a key factor for those considering purchasing a home. Now, a new element has been added to the “location” mix. The availability of broadband access can be a factor influencing prospective home buyers decision when considering where to buy.
Buyers want, at the very least, broadband access and some are even demanding that their area of choice offers fiber optic Internet access. Landlords are also finding that renters will choose the apartment offering broadband Internet access over one that does not.
Sellers, don’t be surprised if a “buyer” asks you if you have broadband access and/or what Internet service providers are in your area.
The increasing popularity of social networks, music and video downloads have made the speed in which the user can access the Internet a vital concern for many. The fact that people are using the Internet for their business and can work from home is also an influencing factor.
Mobile phones are no longer just phones. They are cameras and mini laptops which not only have Internet access, but very fast download times as well. People who have instant access to the world at large are not going to come home to a home that does not offer the same speed as the phone in their pocket.
Home buyers and sellers will see this growing national trend impact the Austin real estate market as well.
Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas, Uncategorized | Tags: affordable places, austin housing market, Austin Texas, austins residential market, city of austin, housing market study
On November 3, the City of Austin launched an online, comprehensive housing market study so they can better understand the needs and characteristics of Austin ’s residential market. This is a much needed study for the Austin housing market. Through the next two decades, the survey will focus on affordability needs. The study is being conducted by BBC Research and Consulting firm who specializes in housing market evaluations, and is being overseen by the Neighborhood Housing and Community Development Office.
BBC Research and Consulting firm is a leading expert in the housing market supply and demand modeling, 
housing needs studies for special needs populations, and affordable housing needs assessments. The online study is just one of many components in the process. Other components will include stakeholder focus groups that will assist in identifying solutions to the housing issues in Austin , telephone surveys that target a specific number of Austin residents to better understand what their housing needs are, and public meetings, which will be held from November 17 through November 20. The public meetings will be held to gather perception of Austin ’s housing needs as well as the city’s housing preferences. The public meetings will also let you share recommendations for better housing needs.
The housing market studies results will assist Austin ’s decision maker’s in the public, private and nonprofit sectors to contribute resources and make investments to help guide redevelopment and development of more affordable housing throughout the City of Austin .
Austin, Texas is not only a great place to live, it will soon be one of the most affordable places to live.
Related Links:
http://www.ci.austin.tx.us/housing/
http://www.ci.austin.tx.us/housing/publications.htm
http://www.ci.austin.tx.us/housing/downloads/08survey_eng_flyer.pdf
http://www.ci.austin.tx.us/housing/downloads/08examen_espanol_folleto.pdf
Questions: aggeler@bbcresearch.com
Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas | Tags: Austin, buyers, capital gains, Housing and Economic Recovery Act, investors, move-up buyers, sellers, tax, Tax Alert, taxes, Texas
Tax Alert: the recently passed Housing and Economic Recovery Act contains a tax pitfall for investors and possibly move-up buyers.
For investors, move-up buyers and property owners whose property has increased in value this legislature may not be an economic stimulus or economic recovery for you. The legislation may increase your taxes,so be very aware and plan around it.
Changes affect:
- Tax-Free Exchanges – 1031 Exchange
- Capital Gains calculations
- Converting property to or from personal use to second home or investment property
- Investors
- Move-Up Buyers
- Buyers
- Sellers
Investors: Certain “1031″ exchanges will be affected. Please consult with an attorney, a professional tax consultant or financial planner. Complete your transaction before December 31. 2008.
Move-Up Buyers: If you are a move-up buyer and your personal residence has been used as a second home or rental property you will be affected. Time is short to avoid falling under the new capital gains tax law>Complete your transaction before December 31, 2008.
Buyers: You do not know what the future holds. If you should suffer a temporary reverse in finances and needed to rent your home to get through the difficulty the new capital gains structure could affect you. The same is true if you should get a job transfer and converted your home into a second home or rental. It is wise to consult a financial planner or tax professional if these or other circumstances would occur.
Sellers: If your personal residence has been used as a second home or has been used as a rental the change in how capital gains are calculated will affect you. You will pay capital gains taxes on a ratio basis: how many years as a personal residence vs. second home/rental.
Under the old tax structure, savvy real estate professionals (and homeowners) were able to take advantage of the guidelines to help existing home owners move-up, relocate, turn their home into an investment or convert an investment property to a personal residence. How that is done and the taxes that will be paid have changed.
The new tax structure will take effect on January 1, 2009. Please consult a skilled tax accountant. If you plan correctly you may be able to save thousands of dollars in taxes! Investor, buyer, and seller this new tax structure can affect you
If you are considering a move which will involve converting your property to or from a personal residence to a second home or rental please be sure you work with a Realtor® who is “investor” savvy and is current with the recent tax changes.
Finances are always very personal and, like homes, no two situations are exactly alike. I am not a tax attorney, tax consultant or a financial advisor. However, I do know real estate and I do know that the capital gains tax is an important issue for investors, buyers and sellers.
Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas | Tags: buyers, home buyers, Housing Bill, new Housing Bill, tax credit
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.
Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas | Tags: Austin Texas, economy, FHA, Real estate
The latest economic reports this week were not very encouraging but I want to remind you that this is Austin, Texas.
Texas has the strongest economy in the United States with all the major metro areas reporting job growth and lower unemployment rates. Dallas-Fort Worth, Houston, Austin and San Antonio (in that order) were named in the top 10 cities to resist a recession a few months ago by Forbes.com. Since that time, the economic reports for these metro areas has remained stable or imporved. Dallas alone has experienced the highest job growth of any city in the nation.
The Austin real estate market experiened a slower market in 2007 and the beginning of 2008 over the blockbuster year of 2006. However, home values did not decrease. Austin, Texas home values have remained stable or increased. Home sales began rebounding in April 2008, although it is still a buyer’s market with a large inventory of homes.
There is so much positive news (nationwide) that is not widely reported and there is an upside to every downside report, especially here in Texas . Ninety percent of the members of the National Association of Business Economics are reporting that there will not be a recession and the economy will experience growth, albeit a slow growth. “Corporate America” may not be making the same profits as last year, but corporations reported profits in excess of 1.5 trillion dollars in the last quarter.
Do not let the media or the fear of “things to come” rob you of the opportunity to own your own home. Austin home prices are still affordable and mortgage interest rates are still lower than last year’s rates.
If you do not have perfect credit or a 20% down payment, there is still a loan option for you – FHA. FHA offers fixed interest rates (some of the lowest on the mortgage market). FHA also offers flexible guidelines with regard to credit. FHA has recently increased their loan limits (expires 12/31/2008 ) which could increase your purchasing ability. FHA also offers home loans with only 3% down required; part of these funds can be in the form of a gift from a family member, a down payment assistance program or the seller.
Get a step ahead of the inevitable inflation that will come into play in the years ahead. Now is the time to determine what your housing budget will be for the next 15-30 years. When you choose a fixed mortgage rate, your house payment will not change. Inflation has not yet affected the real estate market. Once your home is paid off (a 30 year loan can be paid off in as little as 15 years without a major blow to the budget), you will be living rent free in a home that has more than doubled in value.
According to the experts, as the U.S. housing market improves, so will consumer confidence and the weakening dollar. Be part of the national economy recovery; become a homeowner. One of the best markets to invest in is the Austin real estate market.
Filed under: Austin Texas, Austin Texas News, Austin Texas Real Estate, Real Estate News, Real Estate Tips and Advice, Texas | Tags: Austin, Austin economy, Austin market, economy, gas prices, home
Austin’s market has remained strong with prices increasing while many metro areas in the country experienced a downturn.
The Austin economy has remained strong and gotten stronger while many metro areas are experiencing a downturn in job growth and stability.
Texas was recently named the best place to do business in the nation by CNBC. According to the Real Estate Center at Texas A&M University the Texas economy will remain strong in all of the Texas major metro areas until 2030.
Austin was named #3 in the list of recession proof cities published by Forbes.com (Austin Stands Strong).
All of these factors make for good reasons to invest now in the “American Dream”, homeownership.
Now there is a new factor in the real estate market which makes buying a home in Austin a wise choice, the rising price of fuel.
Location has always been a real estate mantra and with the effect that the high gas prices are having on people’s budget, location may become even more important.
The suburbs may become passé and city living the next big thing. Real estate agents are already getting phone calls from those that want to move back to Austin from the suburbs to avoid the long commutes and high fuel costs.
The money, suburbanites, once saved in mortgage payments by purchasing less expensive homes in the suburbs is now being eaten up by gas prices. Homes in the city are becoming more attractive to suburbanites.
Although, the Feds are predicting that the inflation rate will slow down in the next few months; we will have to wait and see if it slows down enough to avoid an exodus from the suburban areas. Based on today’s gas prices an Austin home is probably a wiser investment for the future than one in the outlying areas.
