The U. S. Government is planning to invest billions of dollars into companies to try and jumpstart the housing market. It has seen a big slump since the ‘credit crunch’ hit and people aren't prepared to take the risk of possible debt and bankruptcy. Federal Housing Tax Credits could be exactly what the housing market needs. Everybody can benefit from it, both sellers and buyers; in fact first time buyers can get a tax credit of up to $7,500 as long as their house is bought between April 9th 2008 and July 1st 2009.
There are no specifics on the type of home they need to buy, it can either be a new build or previously owned. The most important part of this new legislation however, is that a first time buyer is classed as somebody who has not owned a home in the last three years. This means in a married couple neither person can have owned a home in that time, otherwise they are ineligible. This enables more people to be able to claim the tax credit and means that when buying a $150,000 house you are able to save 5% thanks to the Federal Housing Tax Credits.
To actually claim the Federal Housing Tax Credits is extremely straight forward and will not add any extra time on to the process of buying a house, which can be quite long winded at the best of times. In order to receive the credit all you need to do is claim it on your federal income tax return. You do not need to be pre-approved or fill in any additional paperwork but it is always recommended you check you are eligible before buying a house. The last thing you want is to buy a house more expensive than you can afford and then find out you won't be able to receive your credit.
The amount of money available as tax credits is actually capped at $7,500. You are allowed 10% of the value of the house you are purchasing, so on any house up to $75,000 you can save the 10% and get $7,500 off. If you buy a house worth $500,000 you still only save that $7,500.
This legislation has been put together to encourage the first time buyers and people who have been renting for a long time. It should definitely achieve this and start the property markets growing again. Another major advantage of this scheme is that your house will in actual fact be worth more than you bought it for straight away. If you bought a $75,000 home for only $67,500 thanks to the Federal Housing Tax Credits then the moment you move in your house value has gone up by 10%. Add on to this that property values have dropped dramatically in the past few years, then you will suddenly find yourself in a very healthy position. It is just the kind of thing that first time buyers need especially with mortgages being harder to get hold of in the current climate.
Let Virginia Real Estate Gurus Brian Garvin and Jeff West catch you up on current Virginia Real Estate News today. Feel free to use this article but please leave all links and author bio intact.