STEEL FRAMING ALLIANCE | FRAMEWORK ONLINE
August 6, 2008
MARKETPLACE
 
Builder Can Use New Tax Credit To Help Spur Home Sales

Prospective first-time home buyers who have been sitting on the fence now have a significant financial incentive to explore the opportunities available in today’s housing market.

H.R. 3221, the Housing and Economic Recovery Act of 2008 — which was passed by the Congress on July 26 and now is on its way to President Bush for his signature — allows first-time home buyers to take a $7,500 tax credit from the purchase of a single-family home, townhome or condominium apartment.

To get the word out to the home-buying public, NAHB has assembled materials that will help association members maximize the impact of this temporary sales incentive.

Among those resources:

  • NAHB has activated a Web site for consumers — www.federalhousingtaxcredit.com. The site includes details and questions and answers on how home buyers can use the credit.
  • On www.nahb.org/mythbuster, NAHB will be posting talking points, print ads, a consumer handout on the “top reasons you shouldn’t wait to buy a new home,” and a banner ad for Web sites — all geared to alerting home buyers to the availability of the credit. (This site will become active as soon as the legislation is signed by President Bush.)

Any home buyer who has not owned a home during the past three years and is a U.S. citizen who files taxes is eligible to participate in this program. (Some home buyers who are not citizens may also qualify; see #14 in the questions and answers below.)

To qualify, buyers must actually close on the sale of the home on or after April 9, 2008 and before July 1, 2009. The original eligibility period expired in April 2009, but following a major grassroots campaign from NAHB members, the period was extended to enable home builders to include the credit in their sales and marketing next spring and into the early summer — the peak home buying season.

The program does have income limits. Single or head-of-household filers can claim the full $7,500 credit if their adjusted gross income (AGI) is less than $75,000. For married couples filing a joint return, the income limit doubles to $150,000.

Single or head-of-household taxpayers who earn between $75,000 and $95,000 are eligible to receive a partial first-time home buyer tax credit. The same applies to married couples who earn between $150,000 and $170,000.

The credit is not available for single taxpayers whose AGI is greater than $95,000 and married couples with an AGI exceeding $170,000.

A refundable credit means that if a taxpayer pays less than $7,500 in federal income taxes, the government will write them a check for the difference. For example, if $5,000 in federal taxes is owed, the taxpayer would pay nothing and a $2,500 payment would be received from the IRS. If a qualifying home buyer were owed a $1,000 tax refund, they would receive $8,750.

Buyers can take the tax credit on their 2008 or 2009 tax return. Those who close in 2008 take the credit on their 2008 return. Buyers in 2009 have the option of taking the credit on their 2008 or 2009 returns.

The tax-credit program also has payback provisions.

The credit essentially serves as an interest-free loan to be repaid over 15 years. For example, a home buyer claiming a $7,500 credit would repay the credit at $500 per year. If the home owner sold the home, then the remaining credit would be due from the profit of the home sale.

If there is insufficient profit, then the remaining credit payback would be forgiven.

Source: Nation Building News, July 29, 2008

Next Article >>

 

HEADQUARTERS
 

Steel Framing Alliance
1201 15th St., NW,
Suite 320
Washington, D.C. 20005
Phone 202.785.2022
Fax 202.785.3856

 
UPCOMING EVENTS
 
September 25, 2008
“It’s All Green. Are you?: LEED, the New National Green Building Standard and Green Globes” to be presented by Maribeth Rizzuto, LEED AP and SFA Director of Education and Sustainable Construction
Florida CFSEI chapter meeting
Orlando, Florida
More
 
 
October 1, 2008
Steel Framing Alliance 10th Anniversary Dinner
Hyatt Regency Baltimore, Baltimore, Maryland
More
 
 

October 1-3, 2008
METALCON International
Baltimore, Maryland
More

 

 


 
 


Become a Member | Hotline 1-800-79-Steel | Unsubscribe

Brought to you by the Steel Framing Alliance (SFA) on the first Wednesday of each month, Framework Online arms you with the latest news and commentary on the steel framing and construction industries. In addition to industry headlines, trends and project profiles, Framework Online provides information and ideas that will better enable members to increase their participation in the residential and commercial construction markets.