First Time Home Buyer Tax Credit Deadline Looms
Upon the signing of the American Recovery and Reinvestment Act of 2009 (otherwise known as the “2009 economic stimulus plan” or “government stimulus package”), certain United States taxpayers became eligible for an $8,000 tax credit upon the purchase of a home.
First time home buyers are looking for guidance while negotiating their way through the process of finding a new home and completing all of the necessary paperwork before this deadline hits.
Agents and brokers are advising buyers to get their paperwork sorted and completed before the end of this month. Agents are also leading buyers away from short sales, saying the process takes far too long and could cause buyers to miss the deadline.
The tax-credit, due to expire at the end of November 09, has offered many first time home buyers an incentive to purchase a home during this volatile real state market. Builders and real estate groups have been pushing for an extension of the program.
The National Association of Realtors is reporting that it is taking, on average, 2 months to complete a home sale in the current market.
Many sources have expressed cautious optimism that lawmakers will extend the program. There are 20 bills drafted and ready for submission regarding the tax credit. One third of these bills has been introduced recently. Some of these proposals would not only extend the tax-credit time period but would also expand it to include all home buyer’s, remove income restrictions and raise the maximum amount of the tax-credit from $8,000 to $15,000.
Richard Greene, Director of Lusk Center for Real Estate, cautions that the increase in tax-credit from $8,000 to $15,000 could increase home prices while increasing sales.
The NAR estimates that 1.8 million to 2 million first time home buyers will take advantage of the tax-credit this year, and says that roughly 350,000 sales would not have taken place with out it.
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