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New Home Buyer Tax Credit To Be Extended?

Posted on October 21 By Justin McHood

One of the more popular topics relating to housing lately is whether or not Congress will expand the federal tax credit for new home buyers.

Yesterday, executives from the The Mortgage Bankers Association testified before Congress that they needed to "shore up" the housing market and could do so by extending the new home buyer tax credit, extending loan limit increases, and a few other items that will help hopefully encourage lenders to lend more money.

According to an MBA press release:

MBA Chief Economist Jay Brinkmann testified that the housing market and the overall economy are “inextricably linked,” and that while in past recessions housing has driven the recovery, this time the housing market will only regain strength as part of an overall economic recovery.

“While our economy is showing signs of recovery, and a number of local housing markets appear to be reaching the bottom, our long-term recovery will be dependent on the creation of jobs,” Brinkmann said. “As we begin to see new employment opportunities, consumer confidence and spending will also return, and a new wave of home buyers will begin to absorb the oversupply of homes.”

One of the hot topics with many people who are considering buying a home is whether or not the 8000 tax credit will be extended - on that topic, here is what Mr. Brinkman had to say:
Brinkmann emphasized that the Internal Revenue Service reported that more than 1.4 million taxpayers have benefited from the first-time home buyer tax credit enacted by Congress as part of the Housing and Economic Recovery Act of 2008, but set to expire Nov. 30.

MBA supports extending eligibility to all primary residence home buyers; increasing the tax credit to up to 10 percent of the home purchase price up to a maximum of $15,000; requiring the tax credit to be repaid in certain instances , such as when a residence is sold within three years; and allow taxpayers to claim and receive the tax credit immediately and facilitate the IRS sending funds claimed by the taxpayer directly to the settlement agent for use in the purchase mortgage transaction.

While it isn't official yet, one thing is certain - there will be plenty of discussion as to whether or not the new home buyer tax credit will be extended - and possibly expanded.

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