40% of Home Owners Qualify for Tax Credit
If you had to guess the percentage of new home owners who qualify for
the $8,000 tax credit, what would you say? 10%? 25%? Try 40%.
According to an article just published by the New
York Times, 40% of all home buyers will qualify for the tax credit this year.
In February 2009, Congress passed a bill that provided an $8,000 tax
credit for home owners who had not owned a home for the last 3 years.
The credit will cost an estimated 15B, which is twice the projections
made when the program went into effect in February.
While some view that the tax credit is going to people that were planning on
buying anyway, Real Estate experts and analysts believe that the credit
is responsible for several hundred thousand home purchases. At
Lendability.com, most of our purchase customers begin the process with
the tax credit in mind. While we are not CPA’s, we expect that over
80% of our purchase loans will qualify for the credit.
The National Association of Realtors (NAR), a 1.1 million member
organization, wants to extend and expand the program. They
would like to:
• Extend the program through Summer of 2010
• Increase the tax credit amount to 15,000
• Expand program to all buyers, not just first time home buyers.
The sponsor of the original bill, Johnny Isakson, Rep of GA, is
proposing similar changes in his new bill. He states that without
the new bill, there would be a downward spiral of home sales and more
foreclosures, provoking a second recession.
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