The current homebuyer tax credit is $8,000 for first-time home buyers who close by November 30th, 2009. Last week the Senate agreed to extend this $8,000 tax credit for first-time homebuyers PLUS offer a $6,500 tax credit to repeat buyers who have owned their current home for at least five years. The proposed bill states that the homebuyer must have an accepted offer by April 30th, and closing by June 30th.
The first-time homebuyer tax credit was a huge success in 2008, with 350,000 first-time buyers nationally saying they would not have otherwise purchased a home this year (according to National Association of Realtors). But the total volume of house & condo sales in Dane County was still lower for the first 3 quarters of 2009 (4,229), compared to 2008 (4,461) - and both years are significantly lower from 2007 (5,650).
I think the $6,500 tax credit to repeat buyers will do more to stimulate the real estate market. House values have depreciated, and many homeowners have not been able to purchase a new home because they aren't comfortable selling in this market. The $6,500 tax credit will move many of these people to sell and purchase a new home. With these repeat buyers AND first-time homebuyers standing to receive a "free" tax credit from the government, there is a great chance for a significant increase in house & condo sales.
The proposed bill is awaiting approval from the House of Representatives.
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