Buyer Assistance Program: The tax advantages of home ownership

[Frank Zeno]

Buyer Assistance Program

by Pat Zaby


The Federal government has put all the pieces together for an incredible Buyer Assistance Program that you can package and market.

The tax advantages of home ownership allow the owner to deduct the property taxes and interest which lowers their monthly cost of housing. An adjustment can even be made to a taxpayer’s W4 so that more deductions are withheld to realize a higher paycheck throughout the year to balance the deduction of the interest and property taxes when their return is filed.

When the homeowner sells the property, they’re entitled to the exclusion of up to $250,000 or $500,000 in gain based on specific circumstances. What a great deal: live in a home, enjoy it, and avoid tax on the money you make too.

The First-time homebuyer’s tax credit is a fantastic opportunity that basically subsidizes the down payment itself. It may be the chance of a lifetime for the people who are eligible because they must close the sale of their new home by 11/30/09 to qualify. The clock is ticking. For more information, see Pat Zaby’s April 2009 Newsletter – Get Off the Fence for the Tax Credit.

While credit requirements are much tighter now, the interest rates are the lowest they’ve been in 50 years. People who can qualify take advantage of this variable that affects cost of ownership as much as the price. It is imperative that a buyer make a loan application at the very beginning of this process.

There several other things to improve the financing which include concessions by the seller that can be used to pay closing costs or buy down interest rates. Reducing the amount of money it takes to get into a home initially and the monthly payments can be a great incentive to getting a buyer off the fence and acting now.

The professional advice of a knowledgeable agent is more important than ever before. There is so much conflicting information in the media and from people in general that it literally paralyzes potential buyers. Some committed professionals are willing to take the time to learn the current tax laws, financing alternatives, and skills it takes to communicate them.

These agents will help their buyers see a way to secure a piece of the American dream with Buyer Assistance that may not be available together again as they are today.