It looks likely that Senators debating the extension of the First-time Homebuyers Credit will compromise by extending, then phasing out, the credit over 2010. The extension of the First-time Homebuyer’s Credit will most likely work like this: First-time homebuyers who close before April 1, 2010 would get the full $8,000; then the credit’s value would be reduced by $2,000 in each successive quarter until expiring at the end of the year.
See the story here: Senate to Extend, Reduce Homebuyer Credit
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And all those folks that were set to make offers in the next few days to catch that credit, just had second thoughts….
Prepare for winter. It might be slow.
Here’s an update:
http://bloomberg.com/apps/news?pid=20601087&sid=aE4U2k3Pf5oo
This version says that the new credit will be limited to 10% of the home’s purchase price up to a maximum of $7,290, but that it will be available to move up homebuyers as well as first time buyers.
So which is it?
More on the extension of the homebuyer credit:
http://www.reuters.com/article/newsOne/idUSTRE59Q4DR20091027
“”We have that. Done,” Dodd told reporters. He declined to specify the details of the agreement…”
“Senate Majority Leader Harry Reid had backed a narrower version which would extend the full credit through March and gradually phase it out through the end of 2010. Dodd said that the deal would merge the two proposals.”
So now this looks like it may be extended to move up buyers. http://www.businessinsider.com/home-buyer-tax-credit-to-be-extended-and-expanded-2009-10
So I wonder if this will increase the number of homes on the market and will second home purchases be eligible?
To wiilk,
I don’t believe the credit will extend to second homes, just because there would be more opportunity to game the system if you were an investor (of course that couple that listed their 4-year old as a homebuyer were pretty clever).
If the credit is tied to the transaction price, it may have the unintended consequence of propping up higher value homes and raising the price of lower ones–which would raise median home prices (good) but dampen sales (bad) by making it harder for middle income people to qualify for mortgages.
Just goes to show that you can’t rely on anything that comes out of Washington.
Does “Move Up” imply some link to transactional amount being higher compared to the selling price of the old residence? I don’t see any terms in the proposal as to “move up” having any such linkage. Anyone find more on this? If not, retirees cashing out the big house in town and moving to the country to a smaller house will not only be down-sizing and paying less for their new home than what they sold the previous house for, but could get this tax benefit to boot. Seems an unwise use of tax funds to me, but if it applies, I guess people wouldn’t turn it down.
Here is the latest on it….
http://www.marketwatch.com/story/deal-struck-to-expand-homebuyer-tax-credit-2009-10-28
Summary for those who don’t want to go to the link…
“Legislators also have agreed to extend the tax credit through the end of April, according to a Reuters report.
An $8,000 credit for first-time home buyers is set to expire at the end of November. Under a compromise reached by senators, the credit would be expanded to those who have lived in their home for five consecutive years, a Reid spokeswoman said.
The credit for repeat buyers would be $6,500.
The credit reportedly would be available for individuals making up to $125,000 a year and couples earning up to $225,000 per year, up from the current income limits of $75,000 and $150,000, respectively.”
Pardon me for going off-track.
They just lowered the Washoe Property tax for the year 2010. On the short sale house I am trying to close on, the value went down $56,500. It is located in the Robb Dr area. I hope this will pressure the bank to negotiate the price down further.
So what exactly is a repeat buyer? Does someone who buys a home to use as a second home count? Seems that would be the best homebuyer to encourage since they will be helping to reduce the inventory without adding more homes for sale.
Jay, great info and thanks for the heads-up. The 2010 preliminary tax assessments are just going up on the Assessor’s site - not all parcels have posted yet. I’ll definitely do some digging, and report on the trends.
Lower assessments = lower property taxes = lower income to city/county = additional service cuts. Any ideas where to cut the remaining fat?
i just looked at my house in north reno and the assessment went from 223k to 177k. Pretty dramatic drop. Hope property taxes drop 20%+ like they did this last year. PS- I just bought my house in January of this year and yes everyone i know i didnt buy at the very bottom but i got the house i was looking for in a great location that was twice the sqft of the rental i was in and my mortgage is less than the reno i was paying. According to the assessors Property taxes last year were $3700. This year they are $2850. Next year?? $2000? So say conservatively every house in washoe county pays $300 less per year in property tax next year x100,000 houses= $30,000,000 is lost revenue next year, more cleansing of the overgrown goverment
Lower assessments=Lower Abated Taxes from 2005=+3 to 8% last year’s property tax (Irregardless to lower assessment until abatement goes to zero).
Worried Guy- My house was built in 05 and was assessed originally at 384k and has done nothing but go down from there so i should not have any abated taxes so my tax shouldnt go up 3%
Looks like it’ll get done within the week. House and Senate expected to pass an extension of the $8k tax credit through to 30 Apr 10 and extend the eligibility to people who have owned their homes for >5 years.
http://www.nytimes.com/2009/11/04/us/politics/04cong.html?_r=1&hp
Other reports have indicated you have to live in the house to get the credit.
“It would be a big victory for the housing and real estate lobby and for the Senate majority leader, Harry Reid, Democrat of Nevada, who faces a tough re-election race next year in the state with the most claims for the credit per capita.”
Final bill approved by House and Senate looks even better than expected.
http://finance.yahoo.com/news/Congress-votes-for-more-aid-apf-1073869354.html?x=0&sec=topStories&pos=main&asset=&ccode=
“The legislation would extend the program through June of next year, as long as the buyer signs a contract by the end of April. It also offers a $6,500 tax credit to those who have lived in their current residence at least five years.
The measure doubles the income ceiling for eligible individuals to $125,000. Homes must cost less than $800,000 to qualify.”
Shouldn’t be too hard finding a decent place in Reno for less that $800k.