Cindy Liebsch

Peninsula Real Estate News

The Home Buyers Tax Credit May be Extended and Enhanced!

Attention all Bay Area home buyers!  There is a new bill introduced by Howard Coble (Republican Representative from North Carolina), to extend and enhance the HOME (Home Ownership Moves the Economy) Act of 2009

How does this help you?  It continues the home buyer tax credit that is currently in place with some changes that will help home buyers anywhere, even in the Bay Area – including on the gorgeous peninsula.  Think about this, using your tax credit to buy a home in San Carlos, Redwood City, Menlo Park, Palo Alto, Woodside and yes, even Atherton?

The changes submitted in this bill (H.R. 2081) that benefit you are:

1.  It extends the home buyer tax credit through January 1, 2011 – it is currently set to expire December 1, 2009;

2.  It extends the first-time home buyer tax credit to allindividuals who purchase a principal residence (currently, only first-time home buyers as so defined);

3.  Income restrictions are removed – so anyone buying a home can use the tax credit regardless of your modified adjusted gross income

If the HOME tax credit program is extended, it may motivate more people (who have more disposable income) to buy a home and thus, hopefully help the real estate market recover, and attempt to boost the economy even further.  However, the negative impact is that tax payers will be footing this bill.  A double edged sword.  And that is a debate to discuss outside of this blog.

This HOME bill with the changes was referred to the House Ways and Means Committee on June 9, 2009.  To read more go to http://www.govtrack.us/congress/bill.xpd?bill=h111-2801 .

So basically this gives principle residence home buyers $7500.00 per year tax credit claim for two years ($15,000.00).  It is being called the “Cash for Fixers bribe that the market wants”.  It is also being called “the upper middle class neighborhood stabilization plan”.  Call it what you want, it will probably pass.  The House Ways and Means Committee is mostly Democrats with a few Republicans from real estate sore states, and we know the same for the House and Senate.  I will not impose my own political beliefs here.  I just hope that if it does pass, only those that really and truly NEED to use the tax claim will do so. 

We have had a robust July and August compared to most years.  This extended credit could possibly motivate those renters that make a decent living (or more than decent living) who must write a big tax check to the IRS at the end of each year.  It will motivate those with disposable income that have not purchased a house yet for some reason. 

From Los Altos Hills north to Burlingame and every city in between (yes, even Menlo Park and Atherton), the “Cash for Fixers” credit just might make a good impact on our economy in many different ways.  I will keep tabs on the HOME bill and let you know what happens.

113 Responses to The Home Buyers Tax Credit May be Extended and Enhanced!

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