You may have heard about the temporary tax credit available to first-time home buyers as part of the Housing and Economic Recovery Act of 2008.

What you may not have heard is that along with first-time home buyers, the IRS includes anyone who hasn’t owned a home in the previous three years. From the IRS website:

Taxpayers who owned a main home at any time during the three years prior to the date of purchase are not eligible for the credit. This means that first-time homebuyers and those who have not owned a home in the three years prior to a purchase can qualify for the credit.

When you hear “first-time buyer”, don’t you think of someone who has never owned a home? Not so in this case. Good to know.

Before reading on, please understand that I am not a tax guy. I’m not a CPA, tax attorney, or bookkeeper. I am passing on information as I understand it, including the imaginary and fictitious example that follows, but I strongly encourage you to seek further information from a qualified tax professional. Whew.

Tax credit NOT tax deduction

Unlike a tax deduction which reduces your taxable income, a tax credit actually reduces your income tax directly.

For example, let’s say you had an adjusted gross income (AGI) of $35,000 and an overall tax liability of 25% or $8,750. A $1,000 tax deduction would reduce your AGI to $34,000, which would reduce your tax liability to $8,500, saving you an additional $250. On the other hand, a tax credit of $1,000 in the same example would reduce your tax liability to $7,750, saving you the full $1,000. That’s better!

While tons of tax deductions can be found within the convoluted maze that is our tax code, tax credits are few and far between.

Temporary tax credit similar to interest-free loan

The temporary tax credit, which is available to qualified individuals on qualifying purchases made between April 9, 2008 and July 1, 2009, acts very much like an interest-free loan.

The credit is 10 percent of the purchase price of the home, with a maximum available credit of $7,500 for either a single taxpayer or a married couple filing jointly. The limit is $3,750 for a married person filing a separate return. In most cases, the full credit will be available for homes costing $75,000 or more. Whatever the size of the credit a taxpayer receives, the credit must be repaid over a 15-year period.

Although The National Association of REALTORS has urged Congress to eliminate the provision that requires the tax credit to be repaid, there has been no change to that provision as of this writing.

Other things you need to know about the tax credit

Like any good piece of tax code, there are some other qualifications and restrictions. Some of the caveats include:

• Income restrictions – Yes, there is a maximum income limit to qualify for the credit, but you might be surprised how high it is. Joint filers can have a modified adjusted gross income of $170,000 and still qualify.
• Primary residence – Not intended for rental or or vacation properties.
• Arms length transactions – The purchase of the property must not be from a close relative.

There are other restrictions that must be met in order to qualify for the tax credit. Be sure to visit the IRS site for more info. You might want to check out The National Assocaiton of Home Builders site, too. And last, but not least, please check with a tax professional first to make sure you will be able to claim the tax credit.

This temporary tax credit creates a fantastic way for soemone to become a homeowner, but I haven’t heard much talk about it. If you know of someone who may be interested in taking advantage of this unique opportunity, please let them know about it. It’s this first time anything like it has been available to my knowledge.

Related posts:

1. Low Down on the Home Buyer Tax Credit
2. Home Buyer Tax Credit 3.0
3. Stimulus Bill Passes Senate with Modified Housing Credit

Rancho Palo Verde is a small, quiet neighborhood in Mohave Valley of less than 200 homes. It is located off of Laguna Road and Vandersilce, very close to River Valley Highschool.

Asking prices of homes for sale in Rancho Palo Verde currently range from $168,000 – $298,000.

The video below is of the home for sale at 2466 Saguaro Drive. It sits on a large, landscaped lot with gated RV/Boat parking on the side of the house. The interior is amazing, with laminate wood flooring, custom wood shutters, ceiling fans, custom paint. It’s even wired for surround sound.

This home was just reduced from $199,900 to $179,900.

My videography certainly doesn’t do this home justice, but take a look anyway:

Additional Links:

Map to this home

Detailed Information on this Mohave Valley Home for Sale

For more information about this or other homes for sale, please Contact Us or call me toll-free at (877) 704-6700 ext. 23

Related posts:

1. Protect Arizona homes from real estate transfer tax
2. Mohave Real Talk Podcast
3. Mohave Real Talk Podcast #3

Single Family home sales and foreclosure data for Bullhead City as reported to Western Arizona REALTOR® Data Exchange

No Summers of Love in 2006, 2007

May is usually one of the strongest months of the year for home sales in Bullhead City. As the residential market began to fall in 2006, June sales slipped after a typically high May, and July followed suit by kicking off the second half of the year with fewer sales than any month in the first half.

2007 followed a similar pattern. May was the highest selling month, June sales declined, and again July sales were lower than any month in the first half.

And now for something completely different: Bullhead City residential market heats up this summer

As I reported last month, Bullhead City Single Family home sales were up 50% in June this year, while residential sales overall were up 30%. This in stark contrast to 2006 and 2007 when June sales declined 14% and 21%, respectively. Also unlike the last two years when July numbers were even lower than June, this year home sales in July were up another 20% from June.

Foreclosures back in play in July

Foreclosure sales jumped back up in July, with 42.5% of all Single Family homes sold in Bullhead City being bank owned properties. Here is a breakdown of how foreclosure sales stacked up against the rest of the Single Family market:

34 of the 108 new Single Family listings to hit the market in July were foreclosures, compared to only 19 of 101 in June. This means more competition for all sellers. Here’s the scoop on how foreclosures compare with the rest of the Single Family homes on the market:

With 13% of all houses for sale in Bullhead City, and over 40% of all houses sold in July, clearly foreclosures have and will continue to make their mark (and put pressure on prices). 29% of the pending Single Family sales at the end of July were foreclosures, down slightly from 35% at the end of June. With the influx of new foreclosure listings in July, it will be interesting to see how sellers in the rest of the market respond to the competition.

Related links:

Detailed 2nd quarter statistics for Bullhead City, including a break down by property type and comparisons to 1st quarter of 2008 and 2nd quarter 2007.

July Sales Report for Bullhead City, Fort Mohave, and Mohave Valley

Request a list of foreclosures currently for sale

Related posts:

1. Bullhead City Single Family home sales up 50%
2. 4th Quarter Home Sales Info – The Informant
3. Bullhead City Real Estate Report – August, 2008