Barring an extension by congress, the $8000 First Time Homebuyer Tax Credit and the $6500 Move-up/Repeat Homebuyer Tax Credits are set to expire on April 30, 2010. The first time homebuyer tax credit was originally due to expire in November 30, 2009 before it was extended by congress. The first iteration of the tax credit did not include the repeat buyer credit.
Anybody who has not owned a principal residence during the three years prior to the purchase of a home is eligible for the $8000 credit, although certain income limits and price limits on the property do apply. Click here for additional details on how to qualify for the credits.
In order to take advantage of the credit buyers must enter into a purchase contract prior to April 30, and close on their home prior to July 1. According to the National Association of Realtors, as many as two million transactions of existing home sales in 2009 took advantage of the first time buyer credit. Some analysts disagree about the impact of the extension, saying that many of the people who took advantage of the credit would have purchased homes without it.
Many do not expect the tax credit to be extended, as it has been less effective as time goes on and the pool of eligible buyers who have yet to take advantage of the credit shrinks. Senate Finance Committee Chairman Max Baucus said “It is important that this tax credit does not become a permanent fixture of the tax code” and Senator Johnny Isakson remarked “This is the last extension”. Congress does tend to to change its mind depending upon the direction the political winds are blowing, but as of now an extension of the credit seems unlikely.
In many parts of the country, demand for houses, especially on the lower end of the pricing spectrum, has increased substantially as we come closer to the expiration. If you are a renter considering purchasing a home or a current home owner looking to move into a new home, now is a great time to take advantage of these tax credits before they expire. Total Mortgage Services has some of the best mortgage rates in the country and we are experts at with government tax credits. Call 877-868-2503 today to speak to one of our mortgage professionals. Don’t miss out on this opportunity.
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