The First Time Home Buyer Tax Credit:
As the tax credit winds down, we are seeing many people who have not yet committed to a property scrambling to get in under the First Time Home Buyer's Tax Credit deadline. The tax credit is part of the Worker, Homeownership, Business Assistance Act of 2009.
As it stands, the tax credit of $8000 for 1st time home buyers, and $6500 for existing home owners who meet certain guidelines, is set to end on April 30, 2010. In order to receive the credit, there must be a binding contract in place on a property by April 30, and it must be closed on or before June 30.
In order to qualify, a "first time home buyer" must be a person who has never owned a home OR who hasn't had an interest in a principal residence in the last 3 years, the home that is being purchased must be the purchaser's principal residence, and there are certain income guidelines that must be met.
A survey of more than 1,500 sales agents by Campbell/Inside Mortgage Finance found a record 48.2 percent of home purchases were first-time home buyers in March. This is an almost 2% increase of over even last October (46.9%), when the original Tax Credit incentive was set to expire in November 2009. This recent almost 50% share of market activity by first time home buyers sets a record. And it's a record that will trickle up to affect the other price points, markets, and demographics that comprise the modern Real Estate landscape.
The Extension and Expansion of the Tax Credit:
In November of 2009 the Tax Credit was extended, and expanded to encompass and benefit a broader range of home buyers and owners...
In order for a purchaser to qualify for the expanded tax credit designed for home owners who are selling in the current marketplace, there are also income guidelines, and the home being sold must have been consecutively used for 5 of the last 8 years as the seller's primary residence.
This expanded aspect of the tax credit will benefit those whose home may be being purchased by the first time home owners, those who are moving move up, as well as those who may be downsizing. Essentially, if a person has had a significant amount of time in their current home, there is tremendous potential to not only make a profit on the sell, but also get that added incentive, thus creating a balanced and thriving market in varied price points, and driving more money into the economy. It's a win/win:)
With 10 days left and counting, I have seen an increase in showings, calls, and activity across the board. Looks like I'm not the only procrastinator I know. LOL! The beauty of procrastination in this case is that the winding down of the tax credit in conjunction with the Spring boost in sales, is making for an uplifting and promising selling season! With consumer confidence raised, and happy buyers and sellers, we are currently looking at a correcting market on the upswing:)
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