Tax credit “extension” – just the facts.
Another round of misunderstanding.
** UPDATE July 2, 2010 – Congress separated the first time home buyer tax credit and National Flood Insurance Program extensions from their original bill and passed them as H.R. 5623 and H.R. 5569 respectively. President Obama signed them into law on July 2, 2010. **
** Please note: the first time home buyer tax credit extension only applies to those who were already under contract as of April 30, 2010. **
If you have ever read this blog before, you know that I’m quite adamant about keeping you up to date on information about the first time home buyer tax credit, including the occasional rant about agents and other industry people reporting news on tax credit extensions, before they’ve happened or even worse, when they’re pure conjecture. Unfortunately, we’re facing that problem once again. It seems reports have started floating around about a new tax credit extension and I have seen website traffic picking up with searches relating to the first time home buyer tax credit.
On June 16, 2010, the Senate voted on an amendment that would extend the closing date to September 30, 2010 and it passed by a 60-37 vote. The amendment was previously passed by the House and at this point, the House and Senate version must be reconciled before the bill (along with the amendment affected the first time home buyer tax credit) is passed and sent on to the President.
So is the tax credit extended?
No, as I write this, there is no change to the first time home buyer tax credit that expired April 30, 2010. This new amendment would not actually change much either – just the required closing date for those that already had contracts by April 30, 2010 (which was required by the previous law).
If you have a home under contract and the home was under contract before or on April 30, 2010, this amendment will affect you – if it goes into effect as law. The new version would give you until September 30, 2010 to close on your home.
What good does that do? The new amendment is designed to give those buyers with contracts that are short sales or foreclosures a little more time. It is not designed to give anyone who hasn’t already qualified for the first time home buyer tax credit any kind of extension.
If you signed and executed a contract for purchase on a home after April 30, 2010 – you are not eligible for the up to $8,000 being offered under the first time home buyer tax credit.
If it isn’t law, nothing changes.
At this point, it doesn’t matter much who has voted on what – until it moves to the President for a signature and become law, nothing will change and all current eligible home buyers will need to close their transactions by the close of business on June 30, 2010 (at the end of this month).
If you’re currently in a qualifying transaction, please speak with your Realtor® and make sure you check with a tax advisor before claiming any money on your tax forms. The IRS is cracked down hard on fraud from the first time home buyer tax credit and even if you committ the fraud unknowingly, you could still be held liable.
photo courtesy of Kevin Burkett
Email This Post
Print This Post
« FBI issues scam alert for San Antonio real estate. | Home | Open House – 6747 Spearwood in Live Oak »
Comments
Thank you for the info RERockStar, I have a buyer client who signed a short sale contract in mid-March and is still waiting to hear from the bank for lender approval. Can you tell me the latest on this? Sincerely, Erika Foye
Erika – I have heard no further word on any possibility. I know NAR is pushing for it, but at this point, it sounds like it is dead in the water. If they’re still waiting for lender approval, it doesn’t sound very promising for them.
Leave a Comment