Sunday, September 20, 2009
Real Estate Tax Credit May Be Extended
Written By: Lisa Matthys
The White House is considering extending the real estate tax credit for first time home buyers to continue the upward trend in housing sales. The real estate tax credit is equal to 10% of a home’s purchase price up to $8,000. However, currently this tax credit is only available to buyers who close by November 30th unless the White House moves to extend it. Those who qualify include first time buyers and those who have not owned a home in three years. Single buyers must have an adjusted income of $75,000 or less, and married couples must have an adjusted income of $150,000 or less to claim the full amount. Basically, if a qualified individual/couple buys a house and claims the credit on their tax return, they can reduce their amount owed and potentially receive a check if the amount owed is less than the amount claimed. Many supporters of the extension argue that the housing market remains in a fragile state, and letting the tax credit expire could be detrimental to the economic recovery. However, a major deciding factor will be the costs to maintain the program which are adding to the already large federal deficit. Together with a lobbying group of real estate professionals and the barely stable housing market, it is hopeful that Congress will extend the real estate tax credit to boost the economy.