Real Estate Blog - HomeGain

First time buyer tax credit expires in December; maybe

Posted by Marie Scheuring on July 06, 2009 at 03:01 pm

The stimulus package seems to be working.  According to the National Association of Realtors, first time home buyers account for about 40% of the home sales lately.  This figure showing a 5% increase over historical statistics. 

Politicians who think the plan is working are calling for more tax incentives, over another year and to an expanded demographic...everyone who buys a home.  Critics are saying it will decrease tax revenue for an already strained budget.  We saw a very similar situation last year.  The initial tax credit plan that was approved July08, was merely an interest free loan.  When that failed to entice buyers in this unsettled market, the plan that is now in effect was approved.

I think we will see a similar situation in December when the stimulus package expires.  No matter what happens next year, you can't lose by taking the sure thing this year.  You might be tempted to wait and see if there are more incentives next year but you are also risking that there will be no incentives.  

Closing on a home, prior to December 1,2009 (for buyers who have not owned a home in the past three years) will get you $8000 tax credit.  Can't wait until 2010 to get your rebate or expecting to pay a higher tax rate for 09?  You can file an amended 2008 return and take your tax credit now.  My favorite part of the stimulus credit is that if you don't owe $8K in tax, the government will send you a check.  There are income limits, so if you don't need the tax credit, you won't get it.  This may seem a little unfair but the point of the stimulus is to help those who couldn't buy, be able to buy.

Comments (0)