First-Time Homebuyer's Tax Credit

The Stimulus Package has been passed and signed into law, and the dust has finally settled enough for the facts to emerge.  How does the tax credit affect first-time Frederick homebuyers?
 

	2008   Version	Revised  Credit
Amount of Credit	Lesser of 10% of cost of home or $7500	Maximum credit amount increased to $8000
Eligible Property	Any single family residence, including condos, townhouses, co-ops that will be used as a primary residence.	No change. All principal residences are eligible.
Refundable	Yes. Reduces, or can eliminate income tax liability for the year of purchase. Any unused amount of tax credit refunded to purchaser.	No change. Purchasers will continue to receive refund for unused amount when tax return is filed
Income Limit	Yes. Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on joint return). Phases out above those caps ($95,000 and $170,000)	No change. Same income limits continue to apply.
First-time homebuyer only	Yes. Purchaser and spouse may not have owned a principal residence in 3 years previous to purchase.	No change.  Still available for first-time purchasers only. Three-year rule still applies.
Revenue Bond Financing	No credit allowed if home financed with state/local bond funding.	Purchasers who utilize revenue bond financing can use credit.
Repayment	Yes. Portion (6.67% or $500) to be repaid each year for 15 years, starting with 2010 tax filing.	No repayment for purchases on or after January 1, 2009 and before December 1, 2009.
Recapture	If home sold before 15-year repayment period ends, then outstanding balance of repayment amount recaptured on sale.	If home is sold within three years of purchase, entire amount of credit is recaptured on sale.  Applies only to homes purchased in 2009.
Effective Dates	Purchased on or after April 9, 2008, before January 1, 2009	Purchased January 1, 2009 through December 1, 2009

              
                                 
                     The Highland Real Estate Group                      
       Chris & Karen Highland * Frederick County MD Real Estate Agents
                        Specializing in Frederick County Real Estate 
                                             301-831-9947
                                      Real Estate Teams, LLC
                                          isell4u2@msn.com 
                                        Pictures of Frederick

Frederick County Real Estate Market Statistics for January 2009

                                       

* Other notable statistics:

              
                        The Highland Real Estate Group
       Chris & Karen Highland * Frederick County MD Real Estate Agents
                        Specializing in Frederick County Real Estate 
                                             301-831-9947
                                      Real Estate Teams, LLC
                                          isell4u2@msn.com 
                                        Pictures of Frederick                               
                             

Buying Real Estate as a Hedge Against Inflation

As we've all watched the markets teeter since the fall, the outcome is a flood of money from the Federal government in an attempt to return liquidity and stabiliy to our financial system. With actions like these, we can assume that in the future, maybe not this year, but certainly the next, we're going to see sharply higher inflation. In the next 3 to 5 years, inflation will likely be a challenge to our personal finances.

What can we do now to protect ourselves?

Holding on to cash now will give you less return when inflation makes your cash worth less. If we can keep enough liquid to be prepared for emergencies, the rest can be invested. Real estate can be a great inflation hedge.

Buying property now, especially at some of the prices we're seeing in the REO market, with money that you won't need for the next few years, can be a smart way to invest those funds. Purchasing stocks, bonds, real estate, any investment involves risk. But so does doing nothing!

Buying real estate today, and holding it long term, is an important part of a diversified financial strategy. It's a great time to research and learn how to invest in real estate. The right purchase can be a strong part of your plan.

Give us a call to see what opportunities are out there in the Frederick Real Estate market.

The Highland Real Estate Group
Chris & Karen Highland
Frederick County MD Real Estate Agents
Specializing in Frederick County Real Estate
301-831-9947
Real Estate Teams, LLC
isell4u2@msn.com
Pictures of Frederick