National Association of Realtors (NAR) Urges Congress to Extend 1st time Homebuyer Tax Credit

Most real estate professionals, economists and advisors claim that the $8,000 first-time homebuyer tax credit has definitely been a success. Recent home sales statistics support their claim. According to the National Association of Realtors, “Homebuyer interest and housing sales increased almost as soon as the ink was dry on the tax credit legislation. Today's lower prices and interest rates appeal to consumers, but it's been the tax credit that has attracted people to open houses and to homeownership”.

To re-cap, first-time home [condo, town-home and co-op] buyers (i.e. purchasers or their spouses who have not owned a home during the three years prior to the purchase) who purchase a home between January 1, 2009 and December 1, 2009 are eligible for a tax credit, to a maximum of $8,000.

The amount of the tax credit is determined by two factors:
(i) the price of the home- the credit is equal to 10% of the purchase price of the home, up to $8,000; and (ii) the buyer's income- single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—can receive the maximum tax credit. The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for married couples filing jointly. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

The good news is that the buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale. The bad news is that time is running out, since it generally takes between 45 and 60 days to go from contract signing to closing. The 30th of this month begins the “60 day countdown”.

According to the NAR, if the Credit is not extended through 2010, “uncertainty will return and the market might again be frozen -- possibly as soon as October”. In their “call to arms” draft letter to Congress, the NAR explains that “the market has improved, but it has not yet fully corrected itself. The credit needs to be extended for an additional period of time and expanded in order to build upon the progress that's been made. Uncertainty about the future of the credit will dampen consumer demand. The best way to assure continued housing activity is to extend and expand the credit and to do that NOW”.

Many real estate professionals (including this author) agree, and support the NAR in their efforts. If you are a Realtor, and wish to join the cause, simply click on the following link: http://takeaction.realtoractioncenter.com/campaign/hbtc?qp_source=dotorg, and send your message to Congress electronically, via the NAR website. If you are not a Realtor, but wish to add you voice, simply write a letter comparable to the NAR call to arms, send it to your Congressman/Congresswoman, and hope for the best.