As of this writing, the United States House and Senate have approved an extension of the Homebuyer Tax Credit.
The bill is awaiting the president’s signature.
If signed by President Barack Obama, the new legislation will do the following; the first-time homebuyer’s credit will be extended through April 30, 2010 and homebuyers will have until the end of June to close escrow.
Again, if signed by the president, first-time buyers who are currently in escrow may not need to worry about closing by Nov. 30 of this year.
In addition, the income limit is raised to $125,000 for single persons and $225,000 for married couples.
The big change in the tax credit is that buyers who already own homes are eligible for the credit.
Existing homeowners who have lived and owned a home for five of the eight prior years are eligible for a tax credit up to $6,500.
The home being purchased must be $800,000 or less.
Both credits are only available for primary residences.
Second homes and investment properties are not eligible.
Additionally, the tax credit is not retroactive.
For the people who serve our country, the military, a special provision in the legislation extends the tax credit for them until June 30, 2011.
A side note: Congress passed this legislation 403-12 and the Senate passed it by a 98-0 vote.
The estimated cost of this program is $10.8 billion dollars.
Through August, it is estimated that over 1,400,000 first-time homebuyers have qualified for the first-time buyer’s credit.
The National Association of Realtors estimates that of the 1,400,000 million buyers, 350,000 of them would not have purchased a home without the added taxpayer’s incentive from the federal government.
The impact of the first-time homebuyer’s tax credit in the Rim Country has not been dramatic.
We have not seen on a percentage basis the number of first-time buyers that the metropolitan areas have experienced.
Some of my colleagues in Phoenix have said the tax credit had a significant impact on home sales in their areas.
If the new legislation is signed into law, we will perhaps see more homebuyers taking advantage of this new provision.
For an excellent fact sheet and comparison on the new legislation, log onto www.realtor.org.
Ray Pugel is a designated broker for Coldwell Banker Bishop Realty. Contact him at (928) 474-2216.