There’s nothing like misinformation to cause confusion and despair.
The popular story we’ve heard circulating a lot is that—starting January 1st, 2013—anyone selling a home in this country will be hit with a new 3.8% tax to help pay for President Obama’s new healthcare plan.
It’s true that the new tax does take effect with the start of the new year, and it’s true that some real estate sales will be subject to the tax. But it’s not a real estate tax, per se, and many people selling homes will not have to pay the tax.
So, just what is it?
“It” is a tax on some investment income. Interest, dividends, rent and capital gains will be subject to the tax, but only for people whose adjusted gross income is above $200,000, or couples who file jointly and whose AGI is above $250,000.
If you’d like information that makes this tax more understandable, check out this one page flyer showing the Top Ten Things You Need To Know About The Tax.
Hopefully, these facts will show that—while the tax is real and it’s about to take effect—its scope is more limited than many people have been led to believe.
Here are a few news tidbits involving home sales:
…Sales in the Birmingham area shot up 46% in November, marking the second straight month of increases over the previous year, according to the Birmingham Association of Realtors. In November, 879 homes sold, compared to 603 in November, 2008;
…November sales of previously occupied homes surged to their highest point nationwide in nearly three years, according to the National Association of Realtors;
…Lawrence Yun, NAR’s Chief economist, sees continued progress in 2010, even as some of the government’s efforts to stimulate the housing market ease. “We expect a temporary sales drop [before] another surge in the spring when buyers take advantage of the expanded tax credit,” Yun said. That “hopefully will take us into a self-sustaining market in the second half of 2010.”
…Roughly 2 million homebuyers have taken advantage of the $8,000 First Time Buyer’s Tax Credit, according to NAR estimates;
…Sales of new homes, however, dropped 11% in November, their lowest level since April (new home sales represent a dwindling share of the market). Bottom line: If you’re looking for a new home, chances are you’ll find builders extremely anxious to work a deal;
Overall, analysts feel the housing market continues to recover from its recent downturn, with the government’s assistance programs getting much of the credit.
If you’re thinking of buying a home in the Birmingham and Shelby Co. area, the market remains very much in your favor, thanks to a large selection of homes to choose from, motivated Sellers, and a continuation of some of the lowest ever interest rates on loans.
Last, but certainly not least, keep in mind that the First Time Buyer’s Tax Credit, originally set to expire November 30, 2009, has been extended to April 30, 2010. The government has also expanded the program to provide incentives for current homeowners who relocate — click here for details.
Maybe things are getting better.
Pending sales of homes in the U.S. rose in June for the fifth straight month, according to the National Association of Realtors.
For the first time in five years, sales of homes have risen for three months in a row, according to NAR.Â Sellers pricing their properties attractively, low mortgage rates and the $8,000 tax credit for first-time home buyers are getting credit for the rise.
For a number of market analysts, this trend is better than expected, and gives reason to believe the real estate market will continue to improve.
In the North Shelby county/Hoover area, 787 properties are for sale as August gets underway, according to the Birmingham Multiple Listing System.Â 391 properties are for sale in the Alabaster, Maylene and Saginaw areas, while 505 are for sale in the Shelby county portions of the Helena and Pelham areas.
Here in the Birmingham and Shelby county area, you can still get quite a deal on a mortgage.Â 30-year fixed rates have actually slipped some from a week ago.Â With good credit, you can get a loan in the very low five percent range, while 15-year fixed rates continue to hover between 4.5 and 5%…