I woke up this morning to a deluge of email in my inbox regarding the extension of the first time homebuyer tax credit. Mostly vendors selling their wares to another potential real estate pro (read: customer) by implying that the first time homebuyer tax credit extension is imminent. While this is all nice and good, the fact of the matter is that the first time homebuyer tax credit has not yet been extended by congress. While options are being explored by congress, I wanted to write this post just to make sure that the facts are perfectly clear: The first time homebuyer tax credit has not been extended by congress.
The first time homebuyers tax credit is an $8000 tax credit made available for qualified first time homebuyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. That means if you are a first time homebuyer, your transaction must close before November 30th at midnight to qualify. For all intensive purposes, if you are not in a purchase contract now, you probably will not be able to take advantage of this tax credit. As a result, the National Association of Realtors and other interest groups have been pushing congress to extend this tax credit in an effort to continue to stimulate the housing market.
To some degree, congress agrees (mostly the Senate) and is currently exploring options for extending the tax credit. There are a number of various bills (as much as 15) being authored to extend the credit in various forms. This, again, is all nice and good. The House of Representatives, however, is not as supportive. They are weary of the overall cost per transaction (40k to 80k per credit, depending on whose numbers you believe) and the levels of fraud currently being seen by those claiming the credit. Regardless, there is no extension to the tax credit at this time.
While I personally believe the tax credit will be extended through 2010 and eventually phased out by the end of the year, that is my personal opinion and nothing more. There are many discussions by congress and several efforts by interest groups, but be clear that there is currently NO EXTENSION of the first time homebuyer tax credit in place now. Until such time as a bill is submitted and approved by both house and senate, be extremely wary of resources that openly proliferate the extension is imminent.
Whew. I feel better for getting that off my chest. For more information on the first time homebuyer tax credit program, visit the National Association of Home Builders website at http://www.federalhousingtaxcredit.com/2009/index.html.
Filed under: Buyer's Blog, Market Data, Seller's Blog
Joe Capote 