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Real Estate News – $8,000 Tax Credit to ALL home buyers?
Real Estate News Overview:
A new bill was introduced Thursday by Howard Coble (R-NC) which would allow almost anyone who purchases a principal residence to take advantage of the $8,000 tax credit through the end of 2010.
The proposed bill would also lift the income limitation which currently states that singles earning more than $75k and couples earning more than $150k are disqualified. This would be good news for higher income earners.
The proposed bill also extends the repayment waiver to account for the extended credit availability. Current law states the tax credit does not have to be repaid unless the homeowner sells the property or no longer uses it as a primary residence within 36 months of purchase.
Real Estate Investor Coach Response:
Ok, so what does all this really mean for the creative real estate investor?
I’m glad I asked…. Because this raises a VERY interesting opportunity that may help you sell properties and get a down payment that makes the deal worth while. Now, I have not done this personally, but I have spoken with one of my real estate investor peers and learned a creative technique that appears to be perfectly legitimate. What he is doing is selling his properties with owner financing, or Land Contract, or AITD, (depending on where you live) and allowing his buyers to use their $8,000 tax credit as part or all of their down payment on the house. Pretty smart if you ask me. And in the eyes of his attorney and the IRS this transaction is perfectly legitimate and the tax credit is provided just like it would be for any other conventional sale. He gets his houses sold, the buyer gets the house, the tax credit money goes to the seller when it comes in, the buyer makes payments to the seller and everyone wins! Man, I wish I would have thought of this.
Personally, I’m not sure If I’ll try it because I like to sell my homes through a lease option because then I still own the home for certain tax purposes that work for me. However, on some of my homes where I’ve owned it for more than a year, I may consider this technique to get an extra $8k. If I do I’ll let you know. And if I do, I’ll be sure to consult with my attorney and consider all the “Murphy factors” that could come into play to make sure that everything is done correctly, and so should you!
If anyone as done a deal this way, I’d love to hear about it.
To your Real Estate Investing Success,
Brian Evans
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