Posts Tagged ‘CA home buyer tax credit’

How the New Tax Reform Could Effect Real Estate

Thursday, September 28th, 2017

If you own a home or are thinking about purchasing one, you need to be aware of how the new proposed tax reforms could effect you and the effect they may have on the real estate market. Here are some of the proposed changes:

Tax Increases/Doubling of the Standard Deduction. Taxes could increase for hundreds of thousands of California homeowners, and this will hit the middle class hard. It would also put homeownership out of reach for many buyers.

Recently the National Association of Realtors stated that increasing the standard deduction and erasing others would “effectively nullify the current tax benefits of owning a home” for the majority of people. This could reduce housing demand and home values.

Elimination of State and Local Tax Deductions. These deductions make home ownership more affordable. This could include property taxes, and if implemented homeowners could see a rise of up to $3000 annually, leading to plummeting home values. Potential buyers may not be able to afford property tax increases, pushing them into lower price ranges. Homeowner equity would suffer.

If these new tax laws are implemented it will be a big hit to the housing market, with home purchases slowing  or even grinding to a halt; more importantly, we could face large foreclosures waves heading into the future, which of course could have big implications for the mortgage and banking industries.

Hopefully we will soon see some clarification regarding these proposed changes. Write your Congressional representatives and express your views on the new tax laws. Unless you exist in the 1% of the uber-wealthy you will not likely benefit from the expected changes.

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California Homebuyer Tax Credit Extended

Thursday, March 25th, 2010

Today Governor Schwarzenegger officially signed an extension for the home buyer tax credit through December 31, 2010. The bill provides $200 million for tax credits, allocating $100 million for first time home buyers (defined as those who have not owned a home in the last 3 years) and $100 million for purchasers of new or previously unoccupied homes.

The requirements for the credit are:

1. The residence purchased must be the buyer’s primary residence;

2. The purchaser(s) must live in the home for at least two years after the sale, or will be required to forfeit the credit to the state;

3. Buyers must be at least 18 years old and unrelated to the seller of the property.

The credit will be assessed at 5 % of the purchase price or $10,000, whichever is less, and will be paid over a three year period. This is great news for home buyers and for the housing market, especially with the spring inventory just starting to arrive on the market. Happy hunting!

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