What’s New With Residential Real Estate Tax Credits?
The Internet is practically unanimous about the fact that most Americans who have never owned a house will never be able to buy one unless they get a subsidy from the Bank of Mom and Dad. The policies that expanded homeownership opportunities are long gone. Most people with steady jobs are lucky if they even have enough money in their monthly budgets to pay more than the monthly minimum on their credit card debt; saving for a down payment on a house or condo, especially in the Washington, D.C. area, is out of the question. This year, the federal government has introduced a set of tax credits that aim to make it easier for first-time homebuyers to finalize a real estate purchase. While $10,000 may seem like chump change in today’s economy, the new tax rules could make things easier for people who want to buy a house which will be their primary residence; they could also complicate things for real estate investors. For help strategizing about the feasibility of your real estate purchasing plans, contact a Washington, D.C. real estate lawyer.
A Tax Credit for Young People Who Are Within $10,000 of Being Able to Afford to Buy a House
The IRS will give a $10,000 tax credit to people who buy a house or condo in 2024, provided that the buyers have never owned real estate before. Ten grand is a drop in the bucket compared to the price of even a one-bedroom condo in the far suburbs of D.C., but it will make the difference for a certain subset of buyers, the ones who can almost afford to buy. The Bank of Uncle Sam will show them the same generosity that the Bank of Mom and Dad shows their wealthier counterparts.
A Tax Credit for Established Homeowners Who Make Properties Available to First-Time Homebuyers
One reason that first-time homebuyers are struggling to finalize purchases is that current owners are reluctant to sell, what with the sky-high interest rates. Therefore, the IRS is also providing a tax credit to people who sell their houses to first-time homebuyers. The beneficiaries of this tax credit will likely be homeowners who are within $10,000 of being able to move to a different property.
Real Estate Investors Don’t Get Quite as Sweet a Deal This Year
Approximately a quarter of residential real estate purchases in 2023 were by investors; this is a factor in the difficulty of first-time buyers in finding affordable properties. When they think purely from a financial perspective, most sellers would rather sell to an investor who makes a cash offer than to a first-time buyer who barely qualifies for the mortgage loan. This year, the IRS is reducing the tax credits available to real estate investors, in order to make more room for resident homeowners.
Contact Tobin O’Connor Ewing About Real Estate Transactions
A Washington, D.C. real estate attorney can help you make wise decisions about real estate purchases. Contact Tobin, O’Connor, and Ewing in Washington, D.C. or call 202-362-5900.
Source:
finance.yahoo.com/news/janet-yellen-says-almost-impossible-150015396.html
