There are a lot of rumors going around that the tax credit deadline for closing by June 30th has been extended. I just wanted to people to be informed and know that this is not the law as of yet. The article below is the latest news on this issue. The Senate has agreed on the change but it is wrapped up in a bill with many parts to it. For this to be approved and made a law will take several more steps. So, keep in touch with this and don’t assume that you will be able to close beyond June 30th and still get your tax credit. I will try to keep you updated on this issue as the news comes out from Washington on this issue.
Some of you are waiting on pins and needles to hear if Congress will allow homebuyers more time to close on deals signed by April 30 with the expectation of a $6,500 or $8,000 tax credit, so I checked in with the National Association of Realtors for an update.
Trouble is, the amendment the Senate approved last week — which would push the June 30 closing deadline to Sept. 30 — is attached to a bill that is far from a sure thing.
The American Jobs and Closing Tax Loopholes Act
“is a Christmas tree, it’s got everything in it, all kinds of stuff, and it looks like that bill is going to have a really tough time to be moved in the Senate,” said Lucien Salvant, a spokesman for the Realtors group.
“The Senate has failed twice now to end debate on the major jobs creation bill, so I’m not sure what’s going to happen,” he said.
The trade group believes that as many as 180,000 buyers are in danger of missing the June 30 closing deadline, many of whom are trying to settle on short sales — notoriously not
short when it comes to the time involved.
Even if the Senate does approve the overall bill, it will have to go back to the House for a vote, Salvant said.
The Realtors are hearing no objection for the extension from House leadership, he said. So he thinks it will happen. “But I don’t know when,” he said.
As 2009 comes to a close, we want to share plenty of good news with you on the residential real estate front.
First, we are thrilled to see the federal government pass the extension and the enhancements to the home buyer’s tax credit. This will significantly help the real estate market lead the economy into stronger times. To summarize the new program:
- First-time buyers are eligible for up to an $8,000 credit and now have until April 30, 2010 to be under contract (and close by June 30, 2010).
- Repeat buyers who have lived in their current home for at least five consecutive years of the past eight years are eligible for a tax credit up to $6,500.
- Higher income limits – Both first-timers and repeat buyers may purchase a principal residence up to $800,000. Income limits to qualify have been increased to $125,000 for single tax filers and $225,000 for joint filers.
- Credits are effective NOW – The new legislation replaces the former tax credit scheduled to expire November 30.
- Credits do not need to be repaid – The credits for both first-time buyers and repeat buyers are true credits and do not need to be repaid unless the home is sold within three years of purchase. The credits are claimed on the buyer’s federal income tax return filed for the year they purchase their home.
- Interest rates are still historically low and selection is excellent. The rates are likely to rise in March when the Feds will pull back on the purchase of mortgage-based securities. Act now to lock in those low rates.
In 2009, we saw a true benefit from the previous “First time buyer’s tax credit” which this program has replaced and enhanced. We are very optimistic the new program will prove to spur even more sales activity – a true catalyst to economic improvement.
Additionally, the Lake Norman market has continued to show signs of improvement. While 2009 activity will end the year behind 2008, the second half of 2009 was stronger than 2008. We expect this trend to continue and my forecast is for 2010 to be markedly improved over 2009. There will be one critical impact in 2010 – interest rates are expected to rise in the second quarter as the Fed has indicated an intention to reduce their financial support for mortgage-backed securities which are keeping rates artificially low to spur economic growth. The time to buy or trade residential real estate will never be better than now through April 30, 2010.
Lastly, I expect prices to stabilize somewhat. While foreclosure activity remains high, the demand will improve and that inventory will be absorbed. We do not see prices rebounding to previous highs in the near future.
We look forward to assisting you with your real estate needs. Feel free to call us or visit our website at www.LeeAnnMiller.com
where you will find more than 130,000 homes searchable throughout the Carolinas.
Best wishes for a very happy holiday season and New Year.
The Lee Ann Miller Team