Patti Phillips
Prudential California Realty
6119 La Granada
Rancho Santa Fe, CA 92067
Direct toll free: 800-680-9133
Cell: 619-507-2100 Office: 858-481-2020

Wednesday, July 2, 2008

Could A Homebuyers Tax Credit Be In Our Future?

I am often getting asked if and when it is a good time to "jump in" and buy Real Estate. Read the following article- if you don't think the great prices on property are enough to entice you, perhaps a "buyer's tax credit" would be the topping on the cake!

Calls Growing Louder For A Homebuyers Tax Credit..........

because prices are more realistic and waiting until Congress does anything may waste a golden opportunity for savings. This theory of "buy now vs. later" involves the savings on interest should you wait to purchase when rates go up, as well as missing out on the perfect home you may find.

The National Association of REALTORS® testified recently that a temporary tax credit would be the best incentive to move hesitant home buyers into the market. NAR based its support on the success of a 1975 temporary tax credit designed to "clear an over-supply of newly constructed homes during an economic downturn."

“We urge Congress to move quickly to conference and final passage of this tax incentive,” said Jim Helsel, a NAR Official. Testifying for NAR, Helsel noted “three critical features for an optimal home buyer tax credit.” The credit should apply to all residential real estate, not solely foreclosed properties; it should be temporary and only apply for a short period of time; and it should provide higher income limits than those the House has imposed, particularly for single individuals. “If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but it could also expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel said.

Another result of more homes being sold would be the economic stimulus. The average household will spend more money right after move-in than in any other time-frame in homeownership. From remodeling the new home to buying new appliances, homeowners still drive the economy.

Another organization with a vested interest is the National Association of Home Builders (NAHB). In 1975, when there was almost a three-year supply of vacant houses on hand, lawmakers approved a $6,000 credit spread over three annual installments of $2,000 per year.

According to the NAHB, that carrot brought enough buyers into the market that builders and their subcontractors were able to get back to work. Inventories fell and production doubled, taking the pressure off of housing prices.
This time around, the builders are angling for a $10,000 credit, maintaining that on a price-adjusted basis, that amount is equal to the 1975 credit. There will be continuing coverage of this issue in the next e-alert . Most insiders agree that any new laws will probably include sales that occurred previous to enactment.

So if you are in need of new housing, even just as an investment, jump on the opportunity because if the tax credit is enacted you would probably not loose out. Please consult your sponsor for more suggestions on your individual situation.

(Reprinted from Inman)

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