Looking at the News on Taxes, and Other Things

First, there is an interesting bit of news making the rounds that the $8000 tax rebate will be made available to first time buyers at the closing of their transaction, rather than on tax day.  Right now the first time buyer can borrow funds from family or friends, knowing that they will be getting that $8000 check.  However, how much better it will be if they buyer can apply that $8000 directly to their closing costs, and down payment, right up front.  This news, if proven true, will be very good news indeed.  Here is what I got in an email from our broker:

The 2009 Economic Recovery and Revitalization Act - Included a “refundable” tax credit worth up to 10% of the home purchase price with a maximum of $8,000 for taxpayers who purchase a home between January 1^st and November 30^th 2009

There is a Demand from First-Time Home Buyers – Responsible people with jobs, good credit, and the ability to make monthly mortgage payments. However, many of these potential home buyers still need down payment assistance and they can’t get the $8,000 until after the sale is closed.

A Partnership – Involving Washington Realtors ®, Washington State Treasurer’s office, and State Housing Finance Commission are proposing a Tax Credit Advance Loan Program that would make the $8,000 federal tax credit available at the closing of a home sale. It would be repaid after the buyer’s return is filed and the IRS sends back the tax refund.

The Goal of the Tax Credit Advance Loan Program – Is to make the equivalent of a first-time homebuyer’s tax credit (up to $8,000) available to borrow for down payment, and repay the loan quickly by filing an amended return so that the HFC can turn it around for more down payment assistance to other first-time home buyers.

 The Funds – May revolve as many as three times before the tax credit expires, reaching up to 9000 first-time homebuyers.

 Details of the Program –  Are still being refined, but here are the basics:

• The State makes a deposit with a selected FDIC insured financial institution.
• WA Realtors ® Association and other stakeholders have a stake in the program by backing the loans with funds to provide security against any losses.
• The financial institution then provides the Washington State Housing Finance Commission with a line of credit to advance up to $8,000 to qualified first-time home buyers for a down payment
• The advance loan is returned once the IRS delivers the buyer’s tax credit.

 

 Then we had good news in our region.  USDA has raised the income limits on their loans.  Here in Mason County we are now using these loans more often than in the past, so for us this is a big deal.  Mason County’s limit is now $73,600 for families of 1-4 persons, and $97,150 for families of 5-8 persons.  We love these -0- down loans!  Even with all the USDA requirements. 

Then we had the announcement by President Obama about curbing big corporations who are using tax havens, and other evasive tactics to avoid paying their fair share of taxes. 

So the steps I am announcing today will help us deal with some of the most egregious examples of what’s wrong with our tax code and will help us strengthen some of these other efforts.  It’s a down payment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations.

Note:  we don’t have any H1 N1 (swine) flu in Mason county — yet. 

Tags: corporations, first time buyers, tax credit, tax havens, tax rebate