A New Bandwagon to Jump On!
Yesterday, Congress extended and expanded the tax credit program relating to home purchases. The new program extends the $8,000 1st-time homebuyer tax credit through April of next year and expands the program to include a $6,500 credit for current homeowners who sell their homes and purchase another, provided they have lived in their present home for at least five consecutive years in the past eight years. To qualify, the home purchase must be under contract by April 30, 2010 and the transaction must be closed by July 1st. The income limits for eligible home buyers have also been expanded to $125,000 for single buyers and $225,000 for couples, and the purchase price of the home cannot exceed $800,000.
A tax credit is better than a tax deduction in that it represents a dollar-for-dollar reduction of your federal income tax liability. If your tax liability is already zero, then you get the credit as a refund!
It is presumed that President Obama will sign the bill within the next few days. Once it becomes law, the intended net effect will be a much needed boost for the housing industry. First-time home buyers who missed the boat during the previous program have a second shot at cashing-in on this path to home ownership. Home sales in the second quarter of this year were spurred significantly by first-time buyers taking advantage of the tax credit. Including existing home owners in the program taps into a huge additional reservoir of pent-up demand among people who want to make move, but have been held back by a depressed market. Even homeowners who don’t plan to move stand to gain under this program as increased demand further stabilizes home prices.
What effect all this will ultimately have on home values and interest rates is hard to say. It does seem likely, however, that it will fuel demand, and that typically pushes up costs. Now may be the best opportunity to jump into the market. Current home prices and mortgage interest rates are at bargain levels. How long that will continue to be the case is uncertain as the market continues to rebound.
For more details about how this program might benefit you, go to my website, www.BobDohn.com and click on the tab FREE Info for Buyers.
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
A tax credit is better than a tax deduction in that it represents a dollar-for-dollar reduction of your federal income tax liability. If your tax liability is already zero, then you get the credit as a refund!
It is presumed that President Obama will sign the bill within the next few days. Once it becomes law, the intended net effect will be a much needed boost for the housing industry. First-time home buyers who missed the boat during the previous program have a second shot at cashing-in on this path to home ownership. Home sales in the second quarter of this year were spurred significantly by first-time buyers taking advantage of the tax credit. Including existing home owners in the program taps into a huge additional reservoir of pent-up demand among people who want to make move, but have been held back by a depressed market. Even homeowners who don’t plan to move stand to gain under this program as increased demand further stabilizes home prices.
What effect all this will ultimately have on home values and interest rates is hard to say. It does seem likely, however, that it will fuel demand, and that typically pushes up costs. Now may be the best opportunity to jump into the market. Current home prices and mortgage interest rates are at bargain levels. How long that will continue to be the case is uncertain as the market continues to rebound.
For more details about how this program might benefit you, go to my website, www.BobDohn.com and click on the tab FREE Info for Buyers.
Bob Dohn
Coldwell Banker Residential Brokerage
140-A S. Roselle Rd., Schaumburg, IL 60193
Direct phone: 847-301-3126
Web: www.BobDohn.com
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