Home buyer tax credit extended by Congress
This just in — the tax credit for first-time and repeat home buyers has been extended by Congress, according to this Associated Press (AP) article.
The legislation will now go before President Barack Obama for approval. Assuming he signs the legislation and it becomes law, buyers sweating the June 30 deadline to close on homes and receive a credit can relax a bit — they will have an extra three months to finalize their purchases.
We’ve had one home buyer tax credit or another since 2008. The credit was modified and extended once and then again in November.
Under the terms of the most recent tax credit, first time and repeat buyers were required to get a home under contract before May 1 and then close on it before July 1. Qualified first time buyers could claim up to $8,000 while repeat buyers were to receive up to $6,500 — quite an incentive to purchase a house.
Ah, but some people have had trouble closing in time. The National Association of Realtors (NAR) has estimated that up to 180,000 Americans, in fact, were in danger of missing out on the credit unless they were given more time to close on their homes. The NAR estimates that 2,090 Arkansans were in that particular boat.
Why haven’t people been able to close on their homes prior to July 1? It seems that banks were hit with a lot of mortgage applications from people rushing to beat the deadline — just the thing to delay closings.
On Tuesday, the House of Representatives passed HR 5623 — a bill extending the deadline to Sept. 30. Bear in mind, the extension will only apply to qualified buyers who purchased homes prior to May 1.
The bill passed the House by a vote of 409-5 and then moved on to the Senate. Ah, but a problem popped up — the Senate bill was attached to a bill that would extend unemployment benefits and cost $33.9 billion.
The unemployment bill has met with resistance, thus threatening to derail the last-minute passage of the tax credit extension that the NAR and a lot of homeowners have been demanding for at least a week. The Senate passed the extension by unanimous consent, this stripping it from the unemployment legislation.
Stay tuned — we’ll have more information when it’s available.
Update! According to this Bloomberg article, Obama will sign the extension into law. The National Association of Realtors agrees and says that there will be no gap between the original June 30 deadline and the date Obama signs the legislation into law (i.e., the bill will apply retroactively to cover any buyers who might close after the original deadline has run but before the bill becomes law).
Another update! The IRS reports that Obama has, indeed, signed the tax credit into law. Yes — it’s official.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.