Will the $8,000 First Time Homebuyer Tax Credit Be Extended?
As the deadline for the $8,000 tax credit for first time homebuyers quickly approaches, and realtors and homebuyers alike scramble to submit and accept offers, the inevitable question on everyone’s minds is whether or not this credit will be extended. The $8,000 tax credit to first time homebuyers was originally part of a $787 billion stimulus package enacted by the Obama administration earlier this year that included tax relief and other fiscal relief ($2 billion was allotted for the homebuyer credit).
Like, “Cash for Clunkers,” was for the auto industry, the tax credit was meant to be an incentive for first-time homebuyers to enter the housing market, and, to ultimately stimulate the historically floundering housing market. Claiming the $8,000, if you qualify, was as easy as filing your tax returns and receiving the credit. While many people did and do qualify for the credit, those who have owned homes before, and whose incomes are above a certain level, do not. So, as the November 30th deadline looms ahead, several groups are rallying not only for an extension of the bill, but also to widen the restrictions that are currently in place.
The National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) have been forming lobby groups to persuade Congressmen to lengthen the credit through 2010, increase the credit to $15,000, and to allow everyone, not just first-time homebuyers, to be eligible. A bill with these terms has been tossed around in Congress and been voted down, but Senator Kirsten Gilliard has co-sponsored a bill extending the credit, with the present terms, for six months.
The biggest problems standing in the way of the passage of this bill are larger issues that are more pressing at the time, such as healthcare reform. To bring the credit back to the forefront, and to the attention of Congress, NAR and NAHB are furiously searching for “hard facts” about the far-reaching benefits of the tax credit, and how it can continue to benefit the economy. These “hard facts” include the number of homes purchased directly due to the tax credit, and “ripple effects” from these home purchases. Ripple effects could include benefits to local businesses, service industry sectors, new jobs and income generated, and the possible additional tax revenue generated from these new activities.
If NAR and NAHB can demonstrate all of the potential and actual advantages of the tax credit, perhaps then the extension of the credit will be passed in Congress. There has been constant clamor for the past several years over our country’s growing deficit, and an extension of the credit would inevitably add to it and add to budget worries. So, although certain economists feel that the credit is pertinent in stabilizing the housing market (and possibly the economy as a whole), NAR and NAHB must prove that, in the long run, more good than bad will be come from extending the tax credit. We can continue to go on and speculate all we want, but really, it’s just a waiting game to see if the tax credit is extended.
Sources:
“$8,000 Tax Credit for Home Buyers | Economic Stimulus Plan Is Law” New Homes Section. NewHomesSection.com. 17 Feb 2009.
“First Time Homebuyer Tax Credit May Be Extended To All Homebuyers And Increased to $15,000 Through New Bill” Bible Money Matters. BibleMoneyMatters.com
Noah Ostroff is one of the top selling agents in Philadelphia working for Coldwell Banker Preferred. Specializing in the Center City and surrounding areas, Noah Ostroff is at the top of his game, helping buyers get the best prices on properties, and helping sellers get the most they can for their properties. Noah makes the process simple and stress free for his clients. He is great to work with, and will become a great lifelong friend.
Noah Ostroff
Coldwell Banker Preferred
[mailto:noahostroff@gmail.com]noahostroff@gmail.com
215-801-1587
Licensed PA Realtor
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Tags: healthcare reform, housing market, nahb, national association of realtors, noah ostroff coldwell banker, stimulus package, Tax Credit, tax relief, Tax Returns
