The timeline for the extension of the $8,000 first-time buyer credit is being squeezed. As Washington is considering the extension, they are also considering expansion of the tax credit by (1) removing the first-time home buyer requirement, and (2) raising the income limits to $150K for an individual, or $300K for a couple.
The extension/expansion would extend the deadline to June 30, 2010. Johnny Isakson, the US Senator (from Georgia) who seems to be the force behind this extension/expansion has been in the real estate business in Georgia for more than 30 years. He says that “expanding the tax credit has a cost, and it is a significant amount of money…however, it is less than 3 percent of the amount of the stimulus, and we know from what has happened in the last nine months that the homebuyer tax credit works”.
Senator Isakson also believes that opening the tax credit to previous homeowners will encourage the “trade-in” or “move-up” market and will have a similar impact as in the mid-70’s when Congress passed a $2,000 home buyer tax credit. That mid-70’s tax credit is strongly attributed to helping to end the housing recession in 1975-76.
Keep your eyes on Washington … “who knows, Virginia, maybe there IS a Santa Claus” … but, just remember who’s paying the bills.