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Will tax credit for ‘move-up' homebuyers spur you to act?

7:00 am November 5, 2009, by Craig Bland

Late Wednesday, the Senate voted 98-0 to extend the first-time homebuyer tax credit of $8,000 to April 30.

The Senate also took action to spur sales to "move-up" buyers, AJC reporter Bob Keefe writes.

Legislation, which still must be passed by the House, would provide a $6,500 tax credit for homebuyers, as long as they had been in their previous home for at least five years.

The tax credits would be limited to homebuyers who make $125,000 or less as an individual or $225,000 or less as a couple. The cost of the home being purchased may not exceed $800,000.

If these provisions become law, will it push you off the fence? Why or why not?

Posted by Craig Bland on 11/05/2009 06:09 AM

Comments (8)

FTHB - First Time Home Buyers in the Mortgage / Finance Channel

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8 Comments on Will tax credit for ‘move-up' homebuyers spur you to act?

NOV

Craig, I'm interested to see what affect this has, if passed, on the move-up buyers. I think it will still benefit first-time buyers more, but it could allow an existing seller to be more willing to lower the price of their home in order to sell knowing they are getting a $6500 credit. I am not convinced that a move-up buyer who is not highly motivated to buy will suddenly become interested to move just because of the $6500 credit. Thanks for the post.

The problem with the proposal is the five year time frame. I dont' see it being a huge push for a huge percentage of current homeowners.

Do you guys know the reason why movers only get $6500? and FTHB get $8000. Can you guess what reason there would be for the $1500 difference?

My concern is that it will just create excess inventory.

There are also questions about "five out of the last eight years" - it sounds like they have to have owned for eight which will cause confusion for people who are focusing on "five years".

I believe the 5 out of eight refers to someone must have LIVED in the home 5 out of eight years. This would apply to a second home or an investment property.

I think it's only going to grease the wheels of transactions that would have happened anyways. Now maybe a $5000 inspection issue won't be a deal breaker because they'll rationalize that they'll deal with it when they get their tax credit.

What about this situation? I just closed on a house within the last month after selling my previous home. I got nothing when I bought my new house because I wasn't a new buyer, and I'm probably out of luck on my new home because I bought too soon. All the while, my tax dollars pay for everyone else to enjoy this benefit. Thanks a lot, federal government.

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