Tax credit update
Posted by Jolenta Averill on Saturday, October 31st, 2009 at 10:58am.
It's official! President Obama signed a bill on 11/6/09 extending the $8K tax credit for first-time home buyers and offering a new credit of up to $6,500 for some existing homeowners. Please see our Tax Credit Overview to find out what it means to you.
This week the Senate reached a tentative deal to extend the $8K tax credit for first-time home buyers which expires November 30th, 2009. It will be voted on in a cloture vote (ie it has been added to a bill currently on the Senate floor to extend federal unemployment insurance benefits) which is scheduled for Monday, November 2nd at 5pm. Its passage remains uncertain.
The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years, the idea being to keep home sales from slipping as the economy recovers from the worst decline in home prices since the Great Depression.
The demand for new homes and condominiums by step-up buyers is expected to increase dramatically. Estimates by Height Analytics, a research firm in Washington, are that demand would increase by more than two times as step-up buyers are let into the equation. The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real-estate market a bigger boost while preventing real-estate investors from benefiting. Many property experts have cited the credit as a reason for signs of recovery in the housing market in recent months. But that recovery was somewhat undercut by the September drop in new-home sales reported Wednesday.
The credit would be extended from its
current expiration date of November 30th, 2009 to all contracts
entered into by April 30, 2010 and closed before July 1st, 2010. It
is expected that income limits on people claiming the credit would be increased
to $125,000 for singles and $250,000 for couples, from the current $75,000 and
$150,000. The credit phases out for people making more than those amounts.
The $8,000 first-time homebuyer tax credit is set to end soon! While it's clear that the housing market is stabilizing and improving, the crisis is not expected to end this year. If you agree that the credit should be extended and expanded, please make a quick call to your Senator's office to ask for cloture on the Unemployment Insurance Extension bill that contains the tax credit provision. This cloture vote is scheduled for Monday, November 2nd at 5pm. Sixty Senators must vote yes so that a vote can be scheduled on the tax credit.
For more information about working with an experienced, dedicated Realtor for your Madison area home or condo purchase, please call Lake & City Homes Realty broker | owner Jolenta Averill at 608.230.5553. Jolenta is an experienced agent who knows the area and whose top-ranked website includes the very latest buyer and seller tools available anywhere on the Internet.
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Share18 Responses to "Tax credit update"
Karen, The good news is that last night the Senate voted to send this legislation to the House for a vote. That's step 1. It is expected to pass the House and if it does, it will then go to President Obama for his signature. I heard President Obama was not a fan, but the proposal is buried inside a cloture bill on extending unemployment benefits which I'm confident he supports. So I think the chances of it passing and Obama signing it are pretty good. Stay tuned and I will keep my fingers crossed for you and others who need this extra bit of help. Our housing market is improving but I feel it could slide right back downhill if we aren't vigilant about soaking up the extra inventory caused by all the distressed sales.
Posted on Tuesday, November 3rd, 2009 at 11:18 AM.
People are just starting to recover. It would be a shame to see people come so far and then wind up back where they started. Maybe I am wrong but this might also help people who got in over their head avoid foreclosure because again, if their homes are not in the range of a first time home buyer and they are unable to make payments--that extra bump might just be enough to get them a buyer. I hope it passes--I think it would benefit many people and keep the market stats going up instead of slipping back down. Winter is approaching and that is always a rough time of year. This might be enough incentive to get buyers to purchase during a time when sales are generally down. It will keep things moving forward as the market then returns to a time of higher sales in Spring and Summer.
Posted on Tuesday, November 3rd, 2009 at 12:48 PM.
Hi Jolenta, I too am very excited for this new extension. Last week was one of my busiest weeks this year, and it was because of the looming deadline of the first time home buyer tax credit. This week is like a ghost town in the real estate market here, and I know it's because people know they probably don't have time to close the deal in time for the credit. If this legislation doesn't get passed, we could see real estate markets across the country going into a downward spiral. Like you said, we have come a long way, and I hope that we don't screw it up!
Posted on Tuesday, November 3rd, 2009 at 2:48 PM.
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Posted on Wednesday, November 4th, 2009 at 7:46 PM.
Hopefully they do extend it and more people will jump off the fence. It has made it through the house and the senate already!
Posted on Wednesday, November 4th, 2009 at 9:47 PM.
Ashlee, Actually that is not accurate. The legislation passed the Senate on Monday, November 2nd and it is hoped that the House of Representatives will be voting on it today, Thursday, November 5th. It is expected to pass the House and then go to President Obama for his signature. President Obama is said to be in favor of the cloture bill extending unemployment benefits and is therefore expected to sign the bill. Stayed tuned! Jolenta
Posted on Thursday, November 5th, 2009 at 10:26 AM.
Actually the legislation passed the Senate on Monday, November 2nd and it is hoped that the House of Representatives will be voting on it today, Thursday, November 5th. It is expected to pass the House and then go to President Obama for his signature. President Obama is said to be in favor of the cloture bill extending unemployment benefits and is therefore expected to sign the bill.
Posted on Thursday, November 5th, 2009 at 10:28 AM.
It's official! I've just received word from the National Association of Realtors that Congress has passed the unemployment insurance bill which includes an amendment that expands and extends the tax credit. That bill will be sent to President Obama for his signature in the next day or so.
Posted on Thursday, November 5th, 2009 at 8:13 PM.
WOOHOO! That is fantastic news for everyone-agents, buyers, sellers, the banking industry. Recovery in action! Let's hope Obama sees it the same way.
Posted on Thursday, November 5th, 2009 at 10:15 PM.
It's official! Hopefully we get more deals from this now!
Posted on Thursday, November 5th, 2009 at 10:18 PM.
The unemployment rate was reported yesterday as now officially being over 10-percent nationwide, so the tax credit extension for homes is welcome along with any other kind of stimulus program the government can come up with right now.
Posted on Friday, November 6th, 2009 at 1:52 PM.
I am just wondering will they extend the credit? Time is running out now and we need something to continue to make the market better. I have read where we have only used 1/3 of the money. I hope they let us have the rest.
Posted on Saturday, November 7th, 2009 at 3:25 AM.
Thanks for update, Jolenta. Extending the $8000 tax credit for first-time home buyers has helped boost home sales by more than 1 million units this year.
Posted on Monday, November 9th, 2009 at 5:39 AM.
It's official! Last week President Obama signed a bill extending the $8K tax credit for first-time home buyers and offering a new credit of up to $6,500 for some existing homeowners. I've updated this post so it's more obvious this is what the outcome was, rather than having to read through all the comments.
Posted on Monday, November 9th, 2009 at 12:40 PM.
It is a good news not only for the first time home buyers but with everyone. Al last this tax credit program is extended until April 30, 2010. For those who wants to buy new homes or move up is a terrific news and great deal waiting for them as well. Today, is the perfect time to purchase as the home pricing is low, interest rates is low, in addition for that the you can get money from the government if you buy a home.
Posted on Tuesday, November 10th, 2009 at 2:21 PM.
In the short term the tax credit is a good thing, long term we still have issues. Interest rates will start to rise. Unemployment still is very high. Still the tax credit is a good thing; hope to start to real recovery soon. Much like the cash for clunkers incentive when it stopped so did the cars sales.
Posted on Sunday, November 29th, 2009 at 6:08 PM.
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As a current homeowner selling a house and also in the market to purchase a house, I am very interested in the results of last night's vote. It has the potential to bring more buyers to our house (which probably would not be considered a first time home buyer's home) and would allow me to purchase a nicer house than I can currently afford because I will now be paying for a mortgage on my own (divorce...).
Posted on Tuesday, November 3rd, 2009 at 10:06 AM.