Minnesota Real Estate Investors Association, Inc.


First Time Home Buyers Tax Credit

The tax credit has helped a lot of first time home buyers get into a new house with little or nothing down. This has spurred a lot sales that would not have otherwise occurred if there was no first time homebuyers tax credit. This has also helped the economy and the housing market stabilize.

So why wouldn’t congress extend the $8,000 First Time Homebuyers Tax Credit? There are many reasons for and against it. I don’t really care which way they go, I just need to know, so that I know how to plan ahead. And today they just announced that the senate has just passed a bill that would extend the tax credit through the end of June 2010.

It even looks like they will expand the tax credit to include all home buyers, not just first time homebuyers. But let’s take a quick look at who is really getting the bailout here? The majority of properties being bought using the tax credit is bank REO’s and Short Sales. So if you think about it, the buyers are getting a tax credit that they can use towards or to reimburse them for their down payment and closing costs. The lenders who have all that defaulted paper are truly the ones getting bailed out. That is one of the reasons I am not for the tax credit. On the other hand, It is a great selling tool when you can tell the buyers that they have one last shot at getting a property with nothing down.

The bill still needs to go to the house of representatives and then to the president, but I am working under the assumption right now that the tax credit will be extended one way or another.

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Stephen Davis10/28/2009

steve@luinc.comI have to say that I hate not knowing too. It will be great if they do let investors have it too.