Carlsbad, California--I have a hard time wrapping my brain around the $789 billion stimulus package Congress and the President are expected to sign into law. I’ve also grumbled to many that they should just take the money and pay down everybody’s mortgage and reduce everybody’s mortgage interest rate to 4 percent.
That would provide more spendable income for all, stimulate the economy, create jobs and generate taxes at the local and national levels.
But I digress, and mostly want to report that this spending bill has two key benefits that might provide a boost for San Diego real estate as well as green improvements–but the clock is ticking.
The first provision gives first-time home buyers an $8,000 tax credit, provided they purchase a home between January 1, 2009 and August 31, 2009. The devil resides in the fine print, so it is important to note that this $8,000 credit is contingent on home buyers holding property for at least 3 years. If the home is sold in fewer than 3 years, the tax credit must be repaid to the government. We should also note that the date range applies closings, and not sales agreements.
Closings must occur within these 8 months to be eligible.
A second noteworthy and potential benefit for San Diego homeowners is an incentive to further “green” their homes. in the package is that the stimulus package gives existing homeowners incentive to “green” their homes. With tax credits for energy-efficient windows and doors, furnaces and insulation, homeowners may be able to claim larger income tax deductions based on home improvements–up to $1500.
This I would like to research more fully and will share the findings. As always, though, you should consult your tax professional about these things.