Friday, November 20, 2009
Saturday, November 7, 2009
IT'S OFFICIAL - TAX CREDIT IS EXTENDED AND EXPANDED
It's official. President Barack Obama signed into law today, Friday, Nov. 6, 2009, a $24 billion economic stimulus bill. A portion of the bill provides tax incentives to prospective homebuyers, basically extending the deadline for the previous tax credit, and expanding to include 2nd time home buyers.
This extension and expansion of the credit will create a new surge of buyers looking for homes during what is normally considered the off selling season (November to February). In fact, for many sellers that decided to back out of the market and wait until spring to sell again, they will miss out on not only first time buyers looking to take advantage of the credit, but now 2nd time buyers that also want the credit.
The tax credits, added by the Senate, extends the $8,000 credit for first-time homebuyers to June of 2010, as long as the buyer is in a binding contract by April 30, 2010. In addition, the maximum income cap is now increased from $150,000 for a married couple up to $225,000.
The program is also expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least 5 of the past 8 years. This $6,500 credit will greatly help in the move up buyer market, where 2nd time buyers are selling a smaller home and buying larger. Per the previous program, they didn't have access to any tax credits. This will also be very effective for sellers trying to downsize, giving them an incentive to lower their sales price, so they can sell quickly, and buy quickly, to take advantage of the tax credit.
The more than $21 billion cost of the tax credits would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes — a fact Obama touted. "Now, it's important to note that the bill I signed will not add to our deficit. It is fully paid for and so it is fiscally responsible," he said.
To read more about the news story, please click here.
Watch the video by clicking here.
View the National Association of Realtors Chart for details by clicking here.
This extension and expansion of the credit will create a new surge of buyers looking for homes during what is normally considered the off selling season (November to February). In fact, for many sellers that decided to back out of the market and wait until spring to sell again, they will miss out on not only first time buyers looking to take advantage of the credit, but now 2nd time buyers that also want the credit.
The tax credits, added by the Senate, extends the $8,000 credit for first-time homebuyers to June of 2010, as long as the buyer is in a binding contract by April 30, 2010. In addition, the maximum income cap is now increased from $150,000 for a married couple up to $225,000.
The program is also expanded to include a $6,500 credit for existing homeowners who buy a new place after living in their current residence for at least 5 of the past 8 years. This $6,500 credit will greatly help in the move up buyer market, where 2nd time buyers are selling a smaller home and buying larger. Per the previous program, they didn't have access to any tax credits. This will also be very effective for sellers trying to downsize, giving them an incentive to lower their sales price, so they can sell quickly, and buy quickly, to take advantage of the tax credit.
The more than $21 billion cost of the tax credits would be paid for largely by delaying a tax break for multinational companies that pay foreign taxes — a fact Obama touted. "Now, it's important to note that the bill I signed will not add to our deficit. It is fully paid for and so it is fiscally responsible," he said.
To read more about the news story, please click here.
Watch the video by clicking here.
View the National Association of Realtors Chart for details by clicking here.
Subscribe to:
Posts (Atom)