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 creditfor first-time home buyers which expires November 30th, 2009. It will be votedon in a cloture vote (ie it has been added to a bill currently on the Senatefloor to extend federal unemployment insurance benefits) which is scheduled forMonday, November 2nd at 5pm. Its passage remains uncertain.
Theagreement would extend the existing credit for first-time home buyers, worth upto $8,000, while offering a new credit of up to $6,500 for some existinghomeowners. The reduced credit would be available to all home buyers who havebeen in their current residence for a consecutive five-year period in the pasteight years, the idea being to keep home sales from slipping as the economy recoversfrom the worst decline in home prices since the Great Depression.
The demandfor 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 wouldincrease 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 beyondfirst-time buyers and giving the weakened real-estate market a bigger boostwhile preventing real-estate investors from benefiting. Many property expertshave cited the credit as a reason for signs of recovery in the housing marketin recent months. But that recovery was somewhat undercut by the September dropin new-home sales reported Wednesday.
The credit would be extended from itscurrent expiration date of November 30th, 2009 to all contractsentered into by April 30, 2010 and closed before July 1st, 2010. Itis expected that income limits on people claiming the credit would be increasedto $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 marketis stabilizing and improving, the crisis is not expected to end thisyear. If you agree that the credit should be extended and expanded, pleasemake a quick call to your Senator's office to ask for cloture on theUnemployment Insurance Extension bill that contains the tax credit provision.This cloture vote is scheduled for Monday, November 2nd at5pm. Sixty Senators must vote yes so that a vote can be scheduled on thetax 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 (563) BUY-SOLD. 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.