Tax Credits: $8000 or $6500, Take Your Pick

Later Wednesday the House approved what the Senate was selling and the US public is now waiting on their extended tax credits for home buyers.  (By a vote of 403 to 12 for those keeping score)

It is virtually guaranteed to be signed into law by the president this week.  When it is, home shoppers will have until April 30, 2010 to take advantage of the $8000 tax credit for first time homebuyer or $6500 for existing homeowners .  There are  a couple new twists to the extension of the tax credit.

• Income limitations have been raised.  Single – #125,000 and  Married Couples- $250,000
• Homeowners who have been in their homes for 5+ years are eligible for up to $6500 in tax credits.
• The Deadlines – Contracts have to be entered into by April 30,2010 and closed by June 30, 2010

The change for existing homeowners is HUGE in my opinion.  It is not large enough to make everyone move but it will help people get off the fence.

I always wondered why the government chose an expiration date on the original tax credit of December 1st.   Right as the cyclical nature of the real estate market is taking effect they were pulling the plug on the federal stimulus., a “double whammy” effect.  Ending this stimulus in the Spring should be much easier for the market to absorb.

The next question is where is all this money going to come from?  “They” say the government is postponing tax breaks to multinational corporations to offset this expense.   Personally, I think the Fed will have the printing presses running overtime…

Are you a first time homebuyer thinking of taking advantage?  Email or call me for a free copy of “Your First Home”, a very resourceful book that helps you prepare for the process.

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