Doug Patterson ABR®, SFR REALTOR®: First Time HomeBuyers Tax Credit

First Time HomeBuyers tax Credit

Most people will agree that the housing market problem has been a significant problem because of the greed on Wall Street and big business.   It's still in the news everyday.  The $8,000 First Time HomeBuyers Tax Credit has been a tremendous help in bringing the economy back around.  You hear on CNN, MS NBC, and other news services different percentages every week as to what the First Time HomeBuyers Tax Credit has accomplished.  The popular tax credit, which has helped lift the housing market out of its worst slump since the Great Depression, is set to expire on November 30.  Many of us talking with clients have heard expressions such as... "My chances of getting a loan are like a Snowball in "You Know Where!"

Today, I received a notice from one of our most respected Senior Mortgage Bankers in our area, Ann Tucker of Starkey Mortgage, where she pointed out from Washington (Reuters) news, that "top Democrats in the Senate have reached an agreement to extend the soon-to-expire $8,000 tax credit for first-time HomeBuyers.  "We have that. Done,"Senator Dodd told reporters.  GREAT NEWS for first time HomeBuyers.   But what about other home buyers?

It appears that the agreement not only would extend the existing credit for first time home buyers,  but would also offer a new credit of up to $6,500 for some existing homeowners.  That tax credit could help "all home buyers" who have been in their current residence for a five year, consecutive period, during the past eight years. 

These new provisions will prevent this tax credit to be used by real estate investors, since it requires the buyers to actually live in the home.  It's apparent intent is to broaden the availability of the credit beyond first time home buyers,  and continuing to give the real estate market, as a whole, the necessary boost still needed.

This new tax credit would begin December 1, the date the old credit expires, and applies to all real estate contracts "entered into by April 30th".  Those contracts would then need to be closed before July 1, 2010. ...AND, you have to remain in your new home for a minimum of 3 years, or pay back a portion or all of the tax credit received if you move prior to 3 years.

The Wall Street Journal has reported that the tax credit would apply to buyers with an income of up to $125,000 for single persons and $250,000 for couples.  That's much higher than the current income limits of $75,000 and $150,000. 

One question has always been on my mind ever since the first time HomeBuyer tax credit housing was started.  That question is ...How do the reduced taxes affect the government's ability to collect enough taxes to pay for all the things we are doing just now (two wars, etc etc)? 

The answer came from a Bloomberg report from the Joint Committee on Taxation.  They estimate that the revised HomeBuyer tax credit will cost $10.8 billion over 10 years.  Those costs would be offset by provisions delaying a tax break for "multinational companies" that will be effective in 2010.  The conclusion was made that this tax credit bill wouldn't add to the government's budget deficit. 

My hopes and prayers go to our leaders in government for wisdom and cooperation in solving these complicated issues and keeping their promises they've made to us all.

I'm a REALTOR® in Winston Salem and the Triad, North Carolina.  When you need help with Real Estate questions, I'm here to help you.  I may not know all the answers, but I will certainly research them, to get answers to your questions.   That is "my promise" to you, whether you're a first time Home Buyer or looking to sell and then buy a new home. 

  Call Park Place Real Estate or email me for information.

I specialize in working with First Time Home Buyers! 

Check out this Step-By-Step First Time Homebuyer  video!

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