Posted: November 3, 2009 By: Dave Ralston
Congress approved the extension of the first time homebuyer tax credit, but we are not out of the woods yet. The question is now whether or not Senate will give their blessing and pass this first time home buyer tax credit. There are many reasons to support the bill. For instance, a study done by the National Association of realtors (NAR) found an average of $63,000 is injected into the economy for each home sale. Our national economy is recovering but still delicate at this point. Removing the tax credit now, during the slow season, could undo all the work that was accomplished by installing the homebuyer advantage.
Right now the 1st time homebuyer tax cedit is due to expire by December 1st. Buyer are required to have closed their home purchase transaction on or before November 30st, and on top of this there are a few furlough days at the end of November making this date realistically a week before the end of the month. Well hopefully we will have some good news before Senate recesses for the year.
Personally, I predict that the bill will be passed. The plan is not just to extend the tax credit to the first time homebuyer pool; a second stage of economic stimulus will also encourage current home owners to move up. As the pending bill stands now, if a home owner has been in their house for at least 5 years and fits a few other requirements they may qualify for a tax credit up to $6,500.
How long will the homebuyer tax credit be extended? You will have until May to get a home under a mutually accepted contract, and until June to close the transaction. In the Puget Sound area we have seen lots of buyers competeing for homes. Buying a home shouldn’t ever be rushed into, and starting the process and gathering information now will save you money when it’s the right time for you.
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