Tax Benefits of Home Ownership

The Value of Your Itemized Deductions:

It is one thing to say that home ownership generates itemized deductions for Mortgage Interest and Real Estate Taxes, but what does that mean and what are those deductions worth to you?

Itemized Deductions are worth something, if they exceed the amount of the Standard Deduction, which for 2008 was $5,400 for single taxpayers and $10,900 for married couples. Those amounts increased to $5,700 and $11,400, respectively for 2009 and will increase again slightly for 2010.
Itemized deductions also include medical expenses (in excess of 7.5% of Adjusted Gross Income), state income taxes, charitable contributions and theft and casualty losses; so that many of you may be at or close to the level of the Standard Deduction before taking into account Home Mortgage Interest and Real Estate Taxes from the purchase of a home.

The tax benefit value of your Itemized Deductions is the amount of those deductions times your marginal tax rate.

As an example: you were at a marginal tax rate for 2008 of 25% if your taxable income was over $32,550 if you are single and over $65,100 if you are married. Those amounts have increased for 2009 to $33,950 and $67,900, respectively. For 2009 you are in the 28% marginal tax bracket if you are single and your taxable income was over $82,500 and over $137,050 if you are married.

Taxable income is generally your Adjusted Gross Income less your itemized or standard deduction, less your personal exemptions; which were $3,500 per person for 2008, for yourself and all dependents. That amount has increased to $3,650 for 2009.

So if you had deductions from the purchase of a new home of $15,000 (a reasonable amount based upon a purchase price of about $275,000) and had a marginal tax rate of 25%, as noted above, the value of those deductions would be $3,750 ($15,000 x 25%) or about $300 per month to apply to the cost of your new home.

To learn more about Tax Benefits and Home Ownership contact Seth J Driggin

Posted by Seth J. Driggin – Partner

Jebb & Driggin is an Exclusive Buyer’s Agency

Filed under: Benefits of Owning a Home, Tax Benefits of Owning new Home , Tax Deductions and Home Ownership

Outlook On Home Sales Remains Unclear

In the Wednesday, February 24th 2010 Wall Street Journal article “Outlook On Homes Remains Unclear” the authors referenced the recent S&P/Case Shiller home price index report which had “Overall, suggested that the recent positive momentum in the U.S. housing market is gaining further traction and underscores that home prices are continuing to stabilize”.

Robert Shiller, the Yale University economist who cofounded the index that bears his name, called the home-price rebound during the second half of the last year “the most dramatic turnaround” since he began charting home prices in 1987.

Posted by William T. Jebb – Partner
Jebb & Driggin is an Exclusive Buyer’s Agency

Filed under: Boston Real Estate News , Real Estate News, S&P/Case Shiller Home Price Index Report

Mass. home sales, prices rise in Jan.

According to this morning’s Boston Globe article Mass. home sales, prices rise in Jan., Massachusetts home prices and sales surged in January; providing further evidence that the state’s real estate market is on the rise.

The median price for single family homes rose about 10% in January, compared to the same month a year ago; while sales volume increased almost 12% during the same period; marking the 4th consecutive month of double – digit percentage increases in single family home sales.

Condominium prices also rose by almost 17% percent and sales were up about 25% for the same period.

These sales and price increases seem to have surprised some housing specialists.  Hopefully, at least locally, we have seen the bottom in the real estate market and look forward to a strong Spring season.

Posted by Seth J. Driggin – Partner

Jebb & Driggin is an Exclusive Buyer’s Agency

Filed under: Boston Real Estate News, Exclusive Buyers Agent , MA Condo sales up for 2010, MA homes prices up for 2010

Yes, you can buy a home

The article “Yes, you can buy a home” published in the Sunday Boston Globe’s February 21st. edition talks about that although credit is still tight there are six ways to uncover a great mortgage and otherwise make a purchase possible.

Posted by Winnie Henchey – Marketing Director

Jebb & Driggin is an Exclusive Buyer’s Agency

Filed under: Boston Real Estate News, Financing, Homebuyer Market in Boston , Mortgages, Real Estate News

Radon – Should you be concerned?

Radon is an odorless, colorless radioactive gas that seeps into homes from soil. It is also the second-leading cause of lung cancer after smoking. Recently, a news story was published about a couple who had lived in their home for 18 years and discovered dangerous levels of Radon when it was too late. Unfortunately, any home, whether it’s new or old, can have a radon problem. And levels can vary from house to house, even on the same block.

As a home buyer, this may be something you want to take into consideration when you have found a home you’d like to pursue. As a buyer in Massachusetts, you have the option to protect yourself by building into your offer a “Radon Test Contingency” which would allow you to conduct a test of the home to determine whether Radon is present. The test kits range from $125 to $150 and Radon Mitigation systems typically cost $800 to $1,200.

As an exclusive buyer’s agency, we can guide you in making the best decision for you and your family in testing for Radon and what actions to take with the results.

Posted by Matthew S. Kane – Buyer’s Agent

For more info on Radon Email Matthew Kane

Jebb & Driggin is an Exclusive Buyer’s Agency

Filed under: Home Buyer Advice, Radon Test Contingency , Homebuyer advice, Radon, Radon Test Contingency

South Boston – Prime Real Estate/Growing Neighborhood

South Boston has undergone a significant change in recent years.  With a growing number of large condominium complexes being built, the neighborhood has become very desirable.

South Boston Real Estate Picture

New luxury buildings such as 9 West Broadway and the Macallen Building offer high quality service and high-end living, bringing more value and character to an already prominent neighborhood.  Other numerous developments in South Boston have been completed in the recent past, and more projects are underway.  Buyers are quickly noticing this successful expansion and making wise investments.  All signs point to a prosperous South Boston market in the near future, which has shown its strength by remaining steady in the recent past.  If you plan on purchasing property in 2010, South Boston should be on your list of communities to consider.

Posted by Ryan Moore – Buyers Agent

Jebb & Driggin is an Exclusive Buyer’s Agency

Filed under: Home Buyer Advice, Homebuyer Market in Boston, South Boston Real Estate , Home Buying Advice, South Boston Real Estate

A Warren Group report released last week showed a 6.6 percent decline in home prices, dropping below $300,000 for the first time since 2002

As reported in the today’s Boston Metro “A Warren Group report released last week showed a 6.6 percent decline in home prices, dropping below $300,000 for the first time since 2002.” and ” From a buyer’s perspective, low interest rates for 30-year loans along with relatively lower housing prices make it a good time to buy”. See full metro article on Homeowners analyze local landscape

Posted by Winnie Henchey – Marketing Director

Filed under: Homebuyer Market in Boston , Homebuyer marketing in MA, Real Estate News in MA

Homebuyer Tax Credit Expansion

As many of you are aware the First Time Home Buyer Tax Credit was extended. What you may not know are the details of the EXPANSION.

As part of the stimulus plan Congress has passed new legislation that: Expands the credit to grant a $6,500 credit to current home owners purchasing a new or existing home between November 6, 2009 and April 30, 2010.

WHO QUALIFIES?

Current homeowners purchasing a home between November 6, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

WHICH PROPERTIES ARE ELIGIBLE?

The extended Home Buyer Tax Credit may be applied to primary residences, including, single-family homes, condos, town homes, and co-ops.

HOW MUCH IS AVAILABLE?

The maximum credit allowed for current homeowners is $6,500.

HOW IS A BUYER’S CREDIT AMOUNT DETERMINED?

Each home buyer’s tax credit is determined by two additional factors:

1. the price of the home
2. The buyer’s income

Price: The credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income: Single buyers with incomes up to $125,000 and married couples with incomes up to $225,000 may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credits Limits.

IF THE BUYER(s)’ INCOME EXCEEDS THESE LIMITS, CAN HE/SHE STILL RECEIVE A CREDIT?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income are not eligible for the credit.

CAN A BUYER STILL QUALIFY IF HE/SHE CLOSES AFTER APRIL 30, 2010?

As long as a written binding contract to purchase is in effect on April 30, 2010 the purchaser will have until July 1, 2010 to close.*

WILL THE TAX CREDIT NEED TO BE REPAID?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three year period, the full amount credit will be recouped on the sale.

*Military and Foreign Service employees have an additional year to purchase a principal residence in the United States.

If you purchased a home between January 1, 2009 and November 6, 2009, or have questions, please see Federal Housing Tax Credit

We hope you found this information helpful. If you have any questions please contact us at either number below or via email.

Posted by Leslie Cotty

Filed under: Financing, Home Buyer Advice, National Real Estate News , Financing, Home Buyer Advice, Move-up/Repeat Home Buyer Tax Credit

Boston Globe reports “Year’s end lifts sales of condos in Boston”

According to Boston Globe’s Friday, January 29th article see attached link, buyers finally jumped off the sidelines in the last several months of 2009, pushing up both sales and prices.  The number of sales were up about 20% in the 4th quarter compared with the same period in 2008, while median selling prices also increased; by about 4%, for the first 4th quarter gain since 2006.  According to the Globe article, many real estate brokers are reporting a jump in interest as more buyers become convinced that home valuations have hit bottom and many are trying to catch the federal home buyer tax credit before it disappears this Spring.

If buyers are smart, they will also move forward before mortgage interest rates rise.

Posted by Seth Driggin – Partner, Broker

Filed under: Boston Real Estate News, Financing, Home Buyer Advice , Real Estate News

January 25, 2010 -Massachusetts Office of Consumer Affairs and Business Regulation Launched

Nationwide Mortgage Licensing System & Registry, a mortgage licensing system operated by state financial regulators including the Massachusetts Division of Banks launched today.

“NMLS Consumer Access is a fully searchable website that allows the public to view information concerning state-licensed mortgage lenders, brokers and individuals currently licensed through NMLS.” As stated on the Mass.gov website.

For more information please go to: www.mass.gov

For search information please go to: www.nmlsconsumeraccess.org

Posted by Leslie Cotty – Buyers Agent

Filed under: Home Buyer Advice, National Real Estate News , Home Buyer Advice, National Real Estate News