First Time Homebuyer Tax Credit Extended
The hugely popular First Time Homebuyer Tax Credit is set to be extended in November 2009. That being said, the tax credit will have different terms for homebuyers.
You would have to be living under a rock to have missed out on the fact the real estate bubble burst in a big way a few years back. That it happened was hardly surprising considering some markets like Las Vegas were appreciating at more than 25 percent a year. Regardless, the bubble burst and nearly took most of the banking system with it.
The Obama Administration instituted the First Time Homebuyers Tax Credit in an effort to stop the mad decent of home values. The basic idea was to make it easier for first timers to get into the market by giving them a tax credit of up to $8,000 that would greatly minimize the difficulty of coming up with a down payment. If the government could get the bottom of the market moving, the theory was the rest of the market would start to stabilize.
The program has met with some success. While real estate markets have not rebounded robustly, they have at least stabilized for the most part. Now, however, the government is faced with a problem in that the tax credit is set to expire at the end of November. The answer? Extend and add to the program.
The new First Time Homebuyers Tax Credit program provides the same benefits to first time buyers. They get a tax credit up to $8,000 for a new home purchase so long as they haven’t owned a home the previous three years. Ah, but now there is more. Current homeowners who have lived in their homes can also get a tax credit of $6,500 if they “move up” to a new home. Regardless, the new tax credit is extended to homes purchased before the end of April 2010.
The basic idea behind this program is to get the real estate market moving. The expansion to include current homeowners in the program makes a bit of a mockery out of the name, but expanding the First Time Homebuyers Tax Credit is definitely something need to keep the real estate market staggering along.