Martha's Vineyard First-Time Home Buyers See Continued Signs of Assistance and Relief

According to an article in the WSJ this week, the Senate has reached a compromise aimed at continuing assistance to first-time home buyers in the form of a tax credit. The agreement still has to pass the full Senate and the House but if it is approved it will extend the existing $8,000 tax credit for first-time homebuyers as well as add a new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years.

Housing-industry sources in Washington are saying the qualifying income limits will be raised to $125,000 for single taxpayers and $250,000 for joint taxpayers, from the current $75,000 and $150,000. Should this new agreement become law, buyers must have executed sales agreements by April 30, and be able to close escrow by June 30, 2010.

On Martha’s Vineyard, in an effort to stimulate home sales to first-time home buyers, the Martha’s Vineyard Land Bank has increased the credit amount of the “M” Exemption. The “M” Exemption is a credit given only to eligible first-time home buyers toward the Land Bank Fee of 2% of the purchase price of real estate on Martha’s Vineyard.

Prior to September 1, 2004, the “M” exemption was $100,000 and in order to qualify all parties on the deed may not have ever owned real property at any time, not just on Martha’s Vineyard but anywhere. Subsequently, it was increased to $300,000 and the exemption was available to first-time purchasers of real estate who will domicile on the property within two years and hold the property for at least five years from the date of transfer. In the case of spouses, either spouse can have owned or possessed an interest in real property prior to the time of purchase, but not both spouses. As of October 27, 2009, per a recent amendment to the land bank law, first time purchasers may now claim a $400,000 "M" exemption. All of the other requirements of the "M" exemption are unchanged.

To learn more about the Martha’s Vineyard Land Bank please follow this link > What is the Martha's Vineyard Land Bank?

Another Huge Opportunity for Home Buyers

As part of the new Economic Stimulus Bill being thrashed around in the senate, and on top of the Tax Credit proposed for all home buyers allowing them a tax credit at the rate of 10% of the sales price up to a limit of $15,000, there now is Amendment 353.

Amendment 353, proposed by Senator John Ensign, Republican Senator from Nevada, would provide 30 year fixed rate financing at about 4%, for anyone purchasing a primary residence. If this passes the House and if there is more sensitivity by lenders in handling those threatened by foreclosure, we could really be on our way to recovery in the housing market.

Senate Moves to Expand Tax Credit as High as $15,000

This could be an excellent incentive for some home buyers on Martha’s Vineyard who can qualify. Currently, the maximum tax credit is $7500 and that is only for first time home buyers, but if this new amendment approved by the Democratic Senate passes the House and goes into effect, buyers who are purchasing a home as their primary residence, regardless of whether they are first time buyers or not, will receive a $15000 tax credit or 10% of the home purchase price, depending upon whichever is less. The tax credit will be in effect for one year.