Energy Efficient Tax Deductions Reduced for 2011

During the last month of 2010, President Obama singed into law a bill which would allow unemployment benefits and the Bush era tax breaks to continue. 

What wasn’t publicly promoted was that the law:

·        Slashed the popular tax credits for energy-efficient remodeling from the current 30 percent of an improvement's cost ($1,500 maximum per taxpayer) to a 10 percent credit, with a $500 maximum for expenditures on insulation materials, exterior windows and storm doors, skylights and metal and asphalt roofs that resist heat gain.

·        New dollar-specific limits on key improvements that had been eligible for 30 percent credits. These include a $150 tax credit limit on the costs of energy-efficient natural gas, propane and oil furnaces, and hot water boilers, plus a $300 credit limit on the costs of central air-conditioning systems, electric heat pump water heaters, biomass stoves for heating or water heating, electric heat pumps, and natural gas and propane water heaters.

·        Limits allowable tax credits available for energy-efficient windows installed during 2011 to a total of $200, compared with the previous $1,500. On top of that, it prohibits taxpayers who have taken total tax credits in past years exceeding $500 from claiming any additional credits on energy-conservation projects they undertake in the coming year.

It is likely this new law will move people away from doing energy efficient improvements to their homes and more kitchen and bathroom remodeling projects like before.  However, as energy prices continue to increase, taking on these types of projects may be enough of a reward if it means people can save on their energy bills.

Washington Post

Federal Government Extends Deduction of Mortgage Insurance

Just another example of how the Federal Government is trying to entice more people to buy homes by extending tax incentives.

Federal Government has extended the mortgage insurance (MI) tax deductibility to 2011.

Here is a quick breakdown of what it is, how much the average home owner can expect, and how long it will be extended for:

• The law provides for an itemized deduction on federal tax returns for the cost of private mortgage insurance paid by eligible borrowers.
• The law allows qualified borrowers with adjusted gross income of up to $100K to deduct 100% of their MI premiums on the federal tax returns.
• According to an analysis by Bankrate, a leading source of consumer financial information, a homeowner with a $180,000 mortgage would save about $351 in taxes a year.
• This law applies from 2007 – 2011 and may be extended if congress chooses to do so.

Click here for more information on mortgage insurance deductions

Groundbreaking for United Negro College Fund

After many years of waiting, Shaw residents can finally rejoice with the official (but quiet) groundbreaking of the Progression Place, the new headquarters for the United Negro College Fund at 7th and S Streets, NW.

The original project, Radio One, faced many delays which frustrated Shaw residents to no end.  Finally, they pulled out and the city found a new tenant for the project, the United Negro College Fund.

Ellis Development is the developer of Progression Place and it will have 100k s.f. of office space, 224 apartments, and wrap-around ground level retail, serviced by 188 below-grade parking spaces. The development plans also call for a face-lift for 7th Street retail frontages.


Source: DCMud

Washington Region Posts Gains in Housing Prices

The Washington region is one of only four metropolitan areas that has posted a gain in housing prices in the country.

Home prices climbed 3.7% in Washington in October from a year earlier, making it one of the few in the nation to actually go up.

A strong job market, an increase in population, increasing rental prices, and low interest rates have contributed to this increase in demand for housing in the DC region.

If you are considering to buy a house in the near future, now may be a good time to start looking before the interest rates go up and/or housing prices continue to climb.

More information at http://www.washingtonpost.com/wp-dyn/content/article/2010/12/28/AR2010122801269.html

DC Rental Prices are up 22%

DC rental prices continue to go up with fewer and fewer vacancies (NY has more than DC now).  Prices have increased 22% in 2009 from a decade earlier, combined with the fact that DC now has over 600,000 residents (an increase for the first time sine Truman) has led to fewer vacancies with increasing prices for renters.

More information at http://voices.washingtonpost.com/local-breaking-news/dc/the-big-squeeze-dcrent.html

DC $5,000 Homebuyer Tax Credit Extended Two Years Through 2011

Congresswoman Eleanor Holmes Norton succeeded again in securing another two-year extension of the popular $5,000 DC homebuyer tax credit, and business incentives, including a $3,000 wage credit for each DC resident hired by, or already employed at, many DC businesses.  The incentives will be retroactive for 2010 and will continue through 2011. Thanks to Congresswoman Norton for her continued efforts. Read more.

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