Lawmakers are calling to raise and extend the $8,000 tax credit for first-time home buyers to $15,000 and apply it to anyone who buys a home, with no income limitation. In addition there is pending legislation that would even create a new "temporary" $3,000 tax credit to help defray the costs of refinancing mortgages on principal residences.
Currently, a lot of people are taking advantage of the $8,000 tax credit. Expanding the credit would absolutely boost the housing market. I love the idea to enhance and expand the housing market with incentives. It's time to write to your Congressman and Senators and tell them you want this happen as soon as possible.
Here are the current proposals:
*A Senate bill to expand the tax credit to $15,000 (up to 10% of the purchase price) for any home buyer regardless of income was introduced this month by Sen. Johnny Isakson, R-Ga. It is co-sponsored by Senate Banking Committee Chairman Chris Dodd, D-Conn.
The current $8,000 tax credit does not apply to singles earning more than $95,000 a year and couples who earn more than $170,000. Business leaders want the income caps eliminated. Buyers do not have to repay the tax credit if they occupy the home for three years or more.
"It would go a long way toward inducing trade-up buyers into the market," says Lawrence Yun, chief economist at the NAR.
*H.R. 2619 would keep the $8,000 credit in place until June 2010 and expand it to all home buyers was introduced last month by Rep. Kenny Marchant, R-Texas. It would also create an unprecedented $3,000 credit to help offset "qualified refinancing costs" — closing fees, lender charges and the like — through next June.
*H.R. 2606 "The Home Buying Credit Expansion Act" would extend the current credit through Dec. 31, 2010 and would open the credit to all buyers of principal residences.
Mary Trupo, public policy director for the National Association of Realtors, said "if (the credit) is working for first-time homebuyers, then why not for all buyers, with no income limitations? We would like to see the expiration date extended (beyond Nov. 30). Expanding the credit is really the way to stabilize the (housing) market — by making it available to everybody."
Jed Smith, managing director for quantitative research, said earlier projections about the first-time buyer credit ranged into the hundreds of thousands of additional sales. Broadening the credit to all buyers would almost certainly push the total higher.
Whatever form these tax incentives take shape, there is a significant bi-partisen push to extend the housing tax credit and open it up to everybody. Of course I am hopeful they will come quickly, but I am not waiting for it. There is considerable demand right now in the first time homebuyer market, so I am positioning myself and my clients to buy entry level foreclosure homes at wholesale prices now from motivated banks and distressed sellers.
Whether you buy low, fix and quickly sell high, or buy and flip your deal to another investor, it is critical that you structure and contract your deal properly so both your seller and your money partners say yes to your deals. And tomorrow, in my Mastering Mini Lab Interactive Webinar and Conference Call at 6pm PDT (9pm EST) I will show you how. Call 800-310-7730 x2 or register here. Make sure you don't miss this important, live, one time event! Talk to you then!
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