Question: Will the home buyers tax credit be extended?
Good question. Anything which helps generate real estate transactions is welcomed in this economy. Here is how the credit works.
For qualified buyers, the tax credit is equal to 10% of the purchase price of the home, up to $8,000. Like most tax credits, there is a phase out. Meaning, if you make too much money, the credit is not available to you. Singles making over $75k and married couples making over $150k will see the credit reduced.
For now, the credit is set to expire on November 30th. Considering how long it may take to close on a purchase, time is running out for buyers. Currently, there are over 20 bills that have been drafted by Congress concerning the credit. All of this talk in Congress doesn’t guarantee an extension of the tax credit. But it at least shows a high level of interest.
Some proposals eliminate the phase out, so all buyers would receive a credit. Other proposals increase the credit to $15,000. We’ll just have to wait and see if it is extended, and what provisions are included.
There is debate about how much of an effect this credit has on home buyers. Eight thousand dollars is a big tax credit, but some question whether the credit is necessary. Increased real estate transactions are one of the keys to restoring our economy. If this credit actually makes a difference, then I hope it gets extended.
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