Friday, February 27, 2009

Limited Tax Credits Available to New-Home Buyers

Senate Bill 15 was approved by the Governor on February 20, 2009, and provides for a tax credit against the net tax for a taxpayer who purchases a qualified principal residence on or after March 1, 2009, and before March 1, 2010. The maximum amount of credits available to allocate is $100,000,000.00 (one hundred million dollars) and are available on a first come first serve basis.

The following qualifications and limitations apply:

Ø The qualified principal residence is a single family residence, whether detached or attached, that has never been occupied

Ø Allowed for the purchase of one qualified principal residence per taxpayer

Ø Must be occupied for at least two years immediately after the purchase and is eligible for the homeowners property tax exemption

Ø The credit is the lesser of 5% of the purchase price of the qualified principal residence or $10,000.00 (ten thousand dollars). The credit must be claimed in equal amounts over three consecutive tax years beginning with the tax year the purchase is made

Ø The seller must provide a certification to the taxpayer and the Franchise Tax Board within one week of the sale that the qualified principal residence has never been occupied. Upon certification, the Franchise Tax Board will allocate the credit to the taxpayer on a first come, first serve basis.

Ø To claim the credit, the taxpayer will submit with each tax return the certification by the seller.

Monday, February 23, 2009

Federal Foreclosure Prevention Plan Launched

On Wednesday, Feb. 18, President Obama unveiled a major new foreclosure prevention program - the Homeowner Affordability and Stability Plan (HASP). The multi-billion dollar effort is based on three strategies:

Foreclosure prevention by refinancing mortgages held by Fannie Mae and Freddie Mac: The goal is to protect those homeowners with homes that have lost significant value to the extent they are unable to refinance under the current Fannie and Freddie rules. As part of the HASP, Fannie and Freddie will change their policies regarding the amount of equity a borrower must have in their home in order for them to refinance into a mortgage with a lower interest rate.
Homeowners able to refinance their mortgages under these new rules could end up with a lower mortgage payment. In situations where a borrower has lost their job or is experiencing other financial difficulties, the lower payment could prevent them from becoming delinquent on their payments and help them avoid foreclosure.

Homeowner Stability Initiative: This part of the plan will provide a variety of incentives to lenders to keep "at risk" borrowers out of foreclosure. In exchange for federal assistance, lenders will either reduce interest rates or principal amounts in order to also reduce a borrower's payment.

Additional support for Fannie Mae and Freddie Mac: Stabilizing and supporting the two major players in the secondary mortgage market is key to the security of residential real estate. The Treasury Department will take several steps to ensure the viability of Fannie Mae and Freddie Mac, including providing $200 billion to each and purchasing mortgage-backed securities. These actions are anticipated to boost investor confidence in both GSEs and ensure lower interest rates for mortgages purchased by Fannie Mae and Freddie Mac.

For more details about the Homeowner Affordability and Stability Plan, please click here.

Tuesday, February 17, 2009

President Signs Stimulus Bill

Last week Congress passed the American Recovery and Reinvestment Act of 2009. President Obama has signed the bill today. Among other things, the stimulus legislation resets the conforming loan limit cap at $729,750, up from $625,500 and reinstates these 2008 loan limits through Dec. 31, 2009.

The bill also increases the first-time home buyer credit from $7,500 to $8,000, and removes the requirement that the credit be paid back if the buyer stays in the home for at least three years. It also extends the expiration date for the credit from July 1 to Dec. 1, 2009. Homebuyers must have purchased a home after Jan. 1, 2009, and before Dec. 1, 2009, to be eligible for the $8,000 credit.

Thank you to everyone who contacted their Member of Congress in support of the housing provisions contained in this legislation.

State Budget Negotiations Continue ~ As of this time, the California state Senate is still debating an emergency measure to address the state's ever-growing budget deficit. C.A.R. will keep you posted on the budget's possible impact on your business and the real estate market.

Septic Regulation Update ~ The State Water Board (SWB) has extended its deadline for submitting testimony on the currently proposed regulations of septic systems to February 23rd. C.A.R. is deeply troubled by several items contained in these proposals and understands that due to public outcry, the proposals will probably be revised. However, there is still a danger that even the revised regulations may contain a point-of-sale provision. If you would like to submit testimony to the SWB, please click here for background and instructions.

Information compliments of the California Association of REALTORS®

Monday, February 16, 2009

Tips for a Larger Tax Refund

No one ever wants to pay more taxes than necessary, but this year it's even more important to save every penny you can. Here are some tips that can help you get a larger refund:

Property Tax Deduction for Non-Itemizers: Before 2008, only people who itemized their deductions could deduct property taxes. For 2008, individuals who do not itemize can deduct up to $1,000 of property tax on a joint return or $500 on a single return.

Driving Deductions: The IRS increased the cents-per-mile deduction for business-related driving expenses from 50.5 cents to 58.5 cents from July 1, 2008 through December 31, 2008. They also increased the rate for deducting medical and moving driving-related expenses from 19 cents to 27 cents for that same time period.

Disaster Losses: Casualty losses (i.e. like those from storm or fire damage) are normally deductible only to the extent they exceed 10% of AGI. For 2008, casualties in federally declared disaster areas can be deducted without having to abide by the 10%-of-AGI rule, which raises the amount that is deductible.

Capital Losses: Review your portfolio and note all your realized losses for 2008. You can write these off against capital gains and you can have a net loss of up to $3,000 deductible against your salary and other ordinary income. What's more, any excess can be used to offset gains or can be deducted in 2009 or later years.

Retirement Plan Contributions: You can make tax-saving contributions to retirement plans for 2008 through April 15, 2009.

Charitable Donations: Not only can you claim deductions for money and items you donate to a charity, you can also claim deductions for expenses you incur on a charity's behalf (i.e. driving costs, printing costs, long distance phone call costs, etc.).

Make sure you take time to go through your records carefully so you receive the biggest refund possible. And if you are looking for a great tax professional to help you, please let me know and I'll be happy to recommend someone.
Information compliments of Diversified Capitol Mortgage

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Sunday, February 1, 2009

Winter Weather Preparations

We may actually get some rain this winter. To be prepared, we suggest that you have your gutters cleaned. Also, be sure to clean the areasaround your skylights and chimneys. Leaves tend to gather in these areas,which leads to pooled water leaking into the house past the flashings. Over the years, we have also had problems with our sunken living roomsflooding. This is caused by improper surface drainage. Sometimes thes urface drains become blocked, causing rain runoff to gather around thefoundation. Other causes include re-landscaping, which can inadvertently lead to water running toward the foundation.

We suggest that you walk the perimeter of your house during a downpour.Look for backed-up surface drains and water pooling around yourfoundation. Also check for malfunctioning (blocked, broken, leaking)downspouts. As always, if you decide to clean your own gutters, please be ladder safe.
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