First time home buyer credit expires soon

A glance at the calendar reminds us that the Federal First time Homebuyer tax credit will be coming to an end soon. The deadline for having a purchase and sale agreement executed is May 1, 2010 and the closing must occur before July 1, 2010. The credit available for first time home buyers is $8000 and for long time homeowners who purchase a new residence, it's $6500. According to the Treasury Department, more than 1.8 million taxpayers have collected $12.6 billion in tax credits due to this act. The nice thing about a tax credit is that you get the money whether you owe any tax or not, so even if you'd be receiving a refund anyway, your refund would be even larger, possibly even exceeding the amount of taxes you already paid in. Taxpayers who purchase homes during 2010 may also claim this credit on their 2009 tax return (which is due in 13 days) or can wait until their 2010 returns are due.

From our vantage point, homesales have remained flat during the first quarter of 2010. Hopefully the continued availability of this tax credit plus the return of nice weather will cause an uptick in real estate activity in the coming weeks.