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New Tax Rules Could Make Homeownership More Affordable


Good news about personal finances is hard to find these days, especially when it comes to homeownership.  Conventional wisdom has settled on the thesis that buying a house, if you have never owned one before, is beyond your greatest ambitions; it is the previous generation’s American dream, and in an era where households with six-figure incomes live paycheck to paycheck if they are lucky, it has gone the way of the paper dinner napkin.  Many factors, which fluctuate constantly, affect how affordable home mortgage loans are.  These include society-wide trends, such as federally determined interest rates, as well as individual factors, such as your credit score.  National policies influence who can afford to buy a house to some extent, but they usually only have the effect of increasing or decreasing your available funds by the equivalent of a small percentage of the purchase price of the house.  This year, some new tax credits aim to make it easier for first time homebuyers to make the transition into homeownership, and another change to tax rules aims to give residential real estate investors less of an advantage over resident owners.  A Miami foreclosure defense lawyer can help you sort out your mortgage situation in the short term so that you can sell your property this year and qualify for a hefty tax credit.

A Tax Credit for First Time Homebuyers

One new rule for the 2024 tax year gives a $10,000 tax credit to people who buy a house or condominium for the first time in 2024.  This can make your tax bill much less painless if you have managed to qualify for a mortgage by supplementing your income with freelance work, where you ordinarily have to pay 30 percent of your freelance income back to the IRS in taxes.  It effectively makes $30,000 of your gig income tax free.  If you are a first-time homebuyer whose tax burden is already relatively low because you are the breadwinner for a household with multiple dependents, you should see a big enough tax refund to make you want to splurge on some new furniture for your new house.

A Tax Credit for People Who Make a House Available to First Time Homebuyers

One reason that it is so hard for first time homebuyers to buy is that few existing homeowners want to sell.  Who can blame them, when interest rates are so high that their new mortgage will be much more expensive than their old one?  Therefore, Uncle Sam is also offering a $10,000 tax credit to people who sell a real estate property to a first-time homebuyer.

The Gravy Train for Real Estate Investors Loses a Car

Another reason that first-time homebuyers keep getting priced out is that a record high number of home sales in 2023 went to investors.  This year, the IRS is changing the rules to reduce the tax credit on investment properties, freeing them up from resident owners.

Work With a Debt Lawyer About Affordable Home Ownership

A South Florida debt lawyer can help you think realistically about your home mortgage.  Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.



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