On November 6th President Barrack Obama signed a bill extending and expanding the tax credit for first homebuyers. The $8,000 first home buyers tax credit has been extended till June 30. In addition to this the government has also decided to expand the tax credit to another $6,500 to encompass current home owners who are looking to make new purchases.
Changes To The Homebuyers Credit
In an interesting move by the government to spur market sales the government has extended the homebuyer tax credit to existing homeowners as well. In order to qualify for the homebuyer credit, homeowners should have lived in their existing properties for a period of 5 years consecutively in the last 8 years. In addition to this, the grant for the first home buyers has also been revamped. To qualify now individuals should earn less than $125,000 and couples should have a combined income of less than $250,000. These amounts have been revised upwards from $75,000 and $150,000 respectively.
Homebuyer Credit Stimulus – What It Means
This brings us to the next topic of discussion, what of this information do you need to know:
- Buyers Are Expected To Surge: If you are a seller who is waiting to sell his property but has been unable to owing to the slack demand in the market, this might be the right time. With the extension of the homebuyer tax credit, experts expect there to be a surge in the numbers of buyers in the market. In addition to this one must also keep in mind that the extension of the homebuyer credit grant in conjunction with the expansion to include existing home owners and low interest rates, makes this a largely buyers market.
- Timing Is Important: While home buyers have up to April 2010 to make the homebuyer credutgrant, as long as it is under contract by then, only as long as they close it out by the end of June. However, while consumers think that this is a lot of time, in reality they should start shopping now if they feel they are eligible. In the housing world a couple of months is not enough of a window to close the deal. It would be beneficial to have the property under contract by the end of March 2010 so as to ensure you have enough time to close the property.
- Slow Months: While the seller are headed into the months which are traditionally regarded as the slowest for the real estate industry, with the extension of the homebuyer tax credit and also it’s expansion, a lot of new buyers are going to rush into the market therefore making these slow months rather busy to ensure that they make the grant in time.
If however you are in the middle of negotiations or have recently signed a contract it may be beneficial to check your eligibility. As a first step contact your real estate agent or banker to ensure that you can take full advantage of the grant. This extra money will go a long way irrespective of if you are a first home buyer or a existing home owner.
In addition to this prospective home buyers should remember that they can take advantage of the tax credit as long as they have a contract by the end of April and close it out by the end of June. Hence it is very important that consumers time their purchase decisions and ensure that they have sufficient time to make the grant.
