Today the US Senate advances the new Stimulus Bill which includes an increase in the current home buyer tax credit. Currently a home buyer purchasing a home from April 2008 to July 2009 may be entitled to a tax credit up to $7,500. Currently the credit is to be paid back in increments of $500 each year thereafter. The new Stimulus Bill proposes an actual tax credit of 10% of the sales price with a maximum of $15,000. This provision may rid of the requirement to repay the credit, making it a true benefit for the home buyer.
In the article Senate Advances Tax Breaks for Homebuyers, Senator Johnny Isakson said,
“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now”.
“Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”
The Stimulus Bill that was passed by the house last week will be reconciled with the Bill passed today and may have a final approval as early as Thursday February 5th.
Stay tuned for more information regarding this tax break. Rates are still great and inventory is beginning to move again!