Tuesday, September 15, 2009

Home Buying Tax Credit Winding Down

If you are thinking about buying a home this year and want to tax advantage of the Federal Tax credit time may be running out for you. Home buyers must be occupy the home by December 1, 2009 to be eligible for the tax credit, this gives you 76 days to buy, close and move in to the home.

The federal tax credit for first-time buyers has bee a huge motivator for many buyers and has been credited for the upswing in National sales. The question is will buyers end their search if the Nov. 30 deadline arrives and they have not found a home.

The most difficult part of the Credit for Alameda Buyers is the restrictions. The tax credit is for 10% of the purchase price, up to $8,000. The eligibility requirements are defined as buyer who has not owned a home in the past three years. There are also income requirements; the current credit begins to phase out for singles who make more than $75,000 and couples who make more than $150,000.

Many in the industry, real-estate agents and mortgage brokers, are recommending that first-time buyers close no later than the week before Thanksgiving to ensure that you take possession before the deadline and a buyer is not caught in holiday-related office closings or abbreviated schedules that could interfere with the process.

That means finalizing a purchase on or before November 20 and being in contract by the first or second week of October. The National Association of Realtors reports that it is taking nearly two months to finalize a home sale in today’s market. With the clock ticking buyers will need to select a property and make an offer by the end of this month.

There are rumors in the real estate industry that there is a chance the credit will be extended. There are at least 20 bills drafted regarding the credit. Some the bill include language that would not only extend the first-time buyer credit into next year, but would also expand it to include all home buyers, remove income restrictions and raise the maximum amount of the credit, up to $15,000.

1 comment:

  1. "the current credit begins to phase out for singles who make more than $75,000"

    There aren't many homes in the 94501 zip code that a buy could get financed making less than $75k (with the exception of those with high downpayments, which probably excludes most first timers). I don't think this credit or its expiration will have much impact on the Alameda Market.

    Love the blog. Very evenhanded compared to others covering this subject.