It was good news for homebuyers all over the United States last June 30, as the US Congress finally approved a tax credit extension bill.
According to this tax credit extension bill, anyone trying to take advantage of the home buyer tax credit will have the closing deadline extended for those trying to buy homes. Originally, homebuyers who have signed contracts by April 30 needed to go to closing by June 30. With the new bill, they now have until the last day of September to close their purchases. According to real estate agents, many home buyers would not have been able to make the June 30 deadline, had it not been moved. The approval of this bill will also benefit settlement offices and banks, as they are already having a hard time dealing with the sheer number of people who are hastening to close their purchases by the end of June.
The Obama administration has so far been successful in jump starting the sales of American houses in the midst of the economic recession. Since the tax credit was initiated, residents all over the country have been rushing to buy their dream homes. This is because first-time homebuyers can get an $8,000 tax incentive, while homebuyers who are purchasing their primary residence can get as much as $6,500 as tax incentive. This tax credit program has been credited by many, including Senate Majority Leader Harry Reid, as the major factor in boosting up California’s economy and housing market. This is especially true in his hometown of Nevada, where foreclosures have become a common matter.
A bill that covered both the tax credit extension for homebuyers and an extension of the jobless aid program was actually proposed previously in the Senate, but was blocked by the Republicans. The bill fell short by a single vote. The proposition was to extend until November the said program, which provides benefits for residents who have been unemployed for a long time. Approval of this bill would have cost $34 billion; because of this, the Republicans objected. Instead, Mitch McConnell, the leader of the Republicans, suggested an extension of two months using the money from the economic stimulus program last year. The Democrats, however, objected to this. Senator Reid has said that he would again attempt to pass the bill after the recess on July 4th.
The tax credit extension bill has now been forwarded to the office of the President, and awaits his final approval. This has been very popular in markets where home prices have fallen. Homes for sell in El Cajon, a suburb of San Diego have seen an increase in sales because of the tax credit.
Alex Aguilar
Team Aguilar Real Estate Agent & Blogger!
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