Well it has to be somewhat official if Obama sign’s it right? Like it or not, agree or disagree… it’s on again until April 30th 2010 with closing no later than June 30th 2010.
It seems like this ‘tax credit thing’ that will never end. Remember that $7500 tax credit from last year that had to be repaid? It then morphed into the more popular version $8000 housing tax credit that didn’t have to be repaid. So much for the use it or lose it stance if it keeps getting a second or third life 
The Expanded/Extension Home Buyer Tax Credit Details
Anyways, some things remained the same others changed a little bit.
- You must have a signed purchase agreement by April 30th 2010 and close no later than June 30th 2010. Armed Forces personnel are given special exemption: Contract executed by April 30th 2011 and closed by June 30th, also must be deployed outside of the United States for at least 90 days.
- The $8000 remains the same for first time home buyers or up to 10% of the purchase price of the home
- Kicker this time around is that it is also available to ‘move-up’ buyers up to $6500 if they have remained in their homes for the past 5 out of 8 years.
- Income limits have been increased from $75,000 for single and $150,000 for married to $125,000 and $225,000 respectively.
- No go for second home buyers or investors, better luck on the next time.
- Make sure to keep *put* in the house for 36 months or more or the IRS will come calling asking for a payback of 100%
- Hey look, they forgot to add fraud prevention in the last one… but not this time around.
Has The Housing Tax Credit Worked
Some argue it has (mostly industry related professions. cc: realtor’s, loan officers, etc), others say it hasn’t done much but leveraged the future. Sure more people might be swayed into getting out of their existing home, but I can’t believe $6500 is going to do it and if it does, then what come?
A survey conducted by PEW Research claims 85% of home buyers would have bought a house anyways and the stimulus has been unproven so far with mixed results.
Many complaints of the first time home buyer tax credit has been just that, available to only new home buyers. In the Twin Cities area, 2/3’s of all homes that have been sold in 2009 to date have been homes under $200,000. Even though inventory is down and some would argue a seller’s market in some price points, the move-up homes are the ones that are sitting. Luxury homes, is just another story.
The winter is always slow, this might provide a little jolt into the spring season.
I know my opinion doesn’t matter but have been against it since the inception. Let the market it works it way out and now the chance of the tax credit costing an additional $11 billion dollars and subsidies raise prices.
Would much rather have a low interest rate.
The bad part about this is that people might be buying homes based on getting the tax credit when they really should be doing something else. It’s creating a false market and only delaying the inevitable.
Also, it provides no real incentive to buy a home until April 30th. Why? Just stick around and watch the market for a couple of months to see what happens. If prices start to fall again, you made the right choice. If not, you guessed wrong but any ‘expert’ will tell you it’s pretty hard to time the market.
Just my 4 cents.
Oh well, let’s go find a house!
Just rememba, I’m no tax pro. If you need tax advice consult a live person, stay away from the box.
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