Home Buyer Tax Credit To Be Extended

Earlier today the House of Representatives voted 403 to 12 to approved legislation to extend and broaden the homebuyer tax credits. The Senate had already voted and 98 to zero for approval. Over the course of the last several months I have seen Simi Valley home buyers have been snapping up properties in an effort to get their share of the $8000 tax credit. With the expiration date set for November 30th there much speculation about extending and expanding the tax credits and what form they may take.

The National Association of Realtors is one of the largest political lobbying forces in the United States which represents not only my industry, real estate agents, but also represents the interests of property owners and homeowners across America. The National Association Realtors fought hard to lobby Congress to extend and expand this tax credit. There is no doubt that NAR's efforts played a big part in today's victory.

Here are some of the points of the new expansion and extension.

• First-time homebuyers credit can total up to $8000
• Existing homeowners who have owned their home for a minimum of five years can apply for credit of up to $6500 on their purchase.
• April 30, 2010 is the cutoff point for buyers to put a purchase under contract.
• Any purchase under contract prior to April 30, 2010, will have until June 30, 2010 to close escrow.
• Those claiming the credit on their next tax return will need to attach proof of purchase with their return.
• Income limitations have been raised to 125,004 single buyers. And 225,004 couples.

The credit is based off 10% of the purchase price with the maximum credit of $8000 for first-time buyers and $6500 for move up buyers. California purchasers should have no problem hitting the maximum amounts as our base-level homes far exceed the national medium home price.

All that is left is for President Obama to sign the legislation.

It looks as if the shorter time frame coupled with the 60 day escrow. Expiring June 30 is an indicator that this program will not be continued. If the tax credit is a big factor in your next home purchase your window of opportunity is very small. Simi Valley has been experiencing historically low inventories in the entry-level market, combined with low interest rates and the decline in pricing, competition among buyers will remain brisk.

One advantage from now until Super Bowl Sunday is that many in the real estate industry go into hibernation mode. This could create opportunity for buyers who are persistent and diligent in the process.

Ted Mackel Simi Valley Real Estate Agent - Keller Williams Realty
Ted Mackel is a top producer at Keller Williams Realty Simi Valley,
specializing in Simi Valley Real Estate
(805) 432-7705