Will the 1st-Time Homebuyer Tax Credit be extended?

Although opinions vary, most seem to think that the tax credit will, in some form, be extended. If you're not familiar with the credit as it is currently available here's a brief summary, not intended to be a complete analysis.

The tax credit refers to the American Recovery and Reinvestment Act of 2009 and has the following requirements that have to be met for the $8,000 tax credit:

• It is for first-time home buyers only. This means the buyer cannot have owned a principal residence during the three year period prior to the purchase. The purchase is defined as the time of closing, not the acceptance of the offer.
• It does not have to be repaid if you stay in the new principal residence for three years
• It expires on November 30, 2009
• Income requirements for the full credit are: up to $75,000 for single taxpayers and $150,000 for married couples.

Many believe that this credit is largely responsible for the recent pick-up in the housing market. This alone is an excellent argument for an extension of the credit.

If our economy is to continue to pull out of its recent troubles, we need to stimulate the housing market, not by sending people a check for a few hundred dollars, but by inducing consumers to consume. When housing rebounds, so do the industries that depend on housing for their own existence. Carpenters, plumbers, architects, manufacturers of materials, etc. will all find work once again. Activity breeds activity and the housing market has been, and continues to be, the catalyst to get the wheels turning. Once those wheels are turning, and the confidence of consumers is restored, our economy will come back to life - and prosperity.

Several versions of an extended and/or expanded tax credit have been discussed recently by our legislators and hopefully they'll get to work to give the people of our great nation the confidence they need to invest in our economy.

According to Investor's Business Daily, October 29, 2009: "Senate Banking Committee Chairman Chris Dodd said top Dems agreed to extend the 1st-time homebuyer credit. Bloomberg reported Senators are near a deal to extend the program to home sales signed - not closed - by April 30. The credit would be cut 10% to $7,290, but those who've owned their current home for at least 5 years would also be eligible."

Now I'm no fan of Mr. Dodd but I applaud his hard work and efforts to extend the tax credit and expand coverage to non-1st-time home buyers as well. I'll keep an eye out for updates and will share them with you right here.

Thanks for taking the time stop by and read my comments.

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