If anyone is wishing to get into their first house, or hasn't owned in 3 years, the IRS is GIVING an $8,000 tax credit. This does not have to be repaid. The house must be purchased in 2009, and the credit is claimed on your 1040; if you've already filed, you file a 1040X to claim it.

It's a very good deal. Details at the IRS website, tax preparers, accountants, etc.

If only we had a down payment. Think maybe the govt will do for us what they did for the banks? What was that? A resounding NO???? :-)

Lenders, including the FHA, are offering low cost bridge loans to be used as down payment. Repayment of the bridge loan would be a few months later, after the buyer receives their credit.

Edited 1 time(s). Last edit at 06/03/2009 08:21PM by Mert.

Let's see, married filing jointly in 2008 you would have needed an adjusted gross income of around $58,000 to be required to pay $8000 in taxes and therefore eligible to take full benefit of the credit . . . Taking standard deduction etc. you are looking at what, a household income for a couple of around $70,000 or more with no particular income adjustments?

Yes, and the phase out for MFJ isn't until $150,000, I think. But also, there's no minimum income requirement, and is even available to the tax exempt.

Home prices are down, mortgage rates are down. $8000 is a gift and the avenue for many to get into 'their' first home.

But if you have a home buyer with relatively little taxable income they will only see a portion of the credit. The same holds true for the credits for the hybrid cars, etc. and so you really can not plan on the $8000 'gift' unless you are already in a tax bracket where the chances are that you have (or had before foreclosure) a home.

Not quite sure I'm understanding you, but I do not think there is any minimum income criteria to qualify, so long as you get home loan approval. The credit is 10%, up to $8,000, of the purchase price of the home. Are you saying minimum or no taxable income would receive less than the 10%? Foreclosure owners wouldn't qualify, regardless, right?

Foreclosure owners would not qualify because they have 'owned within 3 years', which was the criterion you mentioned.

The issue is that this is a tax CREDIT. Lets say I am married and my household AGI is $58,000 and I owe $8000 in taxes. If I bought an $80,000 house I should indeed get an $8000 credit and end up owing $0 taxes. But lets say that our AGI is only $48,000. That would indicate we owed only $6400 in taxes. We buy that $80,000 house but our real net credit would only be the $6400 in taxes we owe. A credit has to be used in the year it was 'earned', so we just lost $1600 of our 'gift'.

We ran into this when Bert bought his hybrid car. He got this swell tax CREDIT, but by the time you factored in his loss carryforwards from his father's estate and a few other things, his taxable income was well below the amount of the credit, so most of the credit was lost.

Then you have a further issue. Salaries are relatively low in my area while housing has been fairly high because of fixed income retirees buying into the area. Someone likely to have an AGI of $58,000 would not be buying an $80,000 house because it would be an old, small dump. And even the old 3X annual income criteria for buying houses would indicate they would be looking at a $210,000 and up house where a 10% downpayment would be running $21,000. The $8000 credit could be helpful, but probably not up front in purchasing the house.

So overall I'm not too sure who this helps. Folks who are in the income category to maximize use of a 10% credit likely have their house already and are trying to hang onto it. Folks in lower income brackets may be eligible for the credit but are unlikely to get it in full simply because they aren't paying $8000 in taxes to have forgiven with the credit.

No, I am saying we have no $ to even try to buy....

You are in a truly funky market Dee Shops. I was piddling on the internet the other day and found a somewhat 'unique' house on one of the out islands with an acre I think and access to another 5 to graze the horses for only a couple of million. I remember a friend who was working what seemed like a good salaried job in Honolulu and was staying in an uncle's apartment because she couldn't afford a place. It happens on islands--NYC is another example--where there is not enough land for the number of inhabitants.

Yes, and like NYC, they only build for the wealthy...and often times, part-time, residents. But the beach is free! :-)

It is free but somehow access TO the beaches gets snaggled up. It is really annoying here that there are numerous legally mandated "Beach Access" corridors that may have 4-6 parking spaces. Beach residents get all the streets near the beaches posted as "No Parking" and then park in the "Beach Access" spaces. So as a county taxpayer I get to pay for beach renourishment and road replacement (much more frequently needed on beach roads) and all that good stuff but it is hard to get TO the beach unless you luck out and find a beach resident is out and left the parking space open for a few minutes. But the county refuses to mark and enforce those beach access spaces as 2-3 hr max and/or "No Overnight Parking". Once you get to the 'nature preserve' and 'boat ramp' areas you have paid parking at about $1 per hour, but those tend to have crummy beach.

Here, we have some areas like that, and some with wonderful access. On all parts of the island. So far, we are lucky that some former crown lands are deeded as public. One of the VERY few good things that came of the overthrown of the Sovereign Nation of Hawai'i. The rest is crap.

Headlines in today's paper?

"UHM to cut classes." Yes, thank you edu guvner that you are. In a time of over-enrollment in all facets of the public higher ed system here, you are cutting an already shredded this year budget on 30 days notice by $50 mill. That is on top of 15 years of U cuts. I already lost 2 classes this fall. I fear my last will go as well. I am not sure what I will do. I have huge college loans, and a family in a high cost of living area with a husband who is tied by birth, children and grandkids (he started at 15, and one of his kids started at 16) and career to living here. But without a real job I cannot commit to paying the college loans back, and if I default, my life is screwed up forever. It is a no win in a sinking HI economy.