Homebuyer Tax Credit Update 7/1/2006 Passed both The House and The Senate, so pretty much a done deal. Should be signed into Law by the President today.
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NEW UPDATE 6-29 – Looks like this is going to pass as a stand alone Bill. Passed the house by a huge majority and the Senate is expected to pass it any day now…stay tuned
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UPDATE 6-25 The Bill did not pass. The vote was 57-41, three short of the 60 needed.
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Just received this email. Seems to be “Breaking News”:
“NEWS FLASH Senate OKs new tax credit closing deadlineThe Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit. Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.”
All of my June 30 or before closings are closed, but I do have one we did not expect to be eligible for the tax credit, because it is a home being built which is not expected to be completed until August 31 or so.
If the closing date requirement is moved out to September 30, as noted in the quote, my clients will be eligible for the $6,500 credit (not the $8,000 one). Since we were at the showroom yesterday morning trying to decide on wood floors in the living room and dining room, which would cost less than this credit, this could be an important decision making factor.
Of course this is so “hot off the presses” that we need to verify and also wait for it to actually be confirmed and signed. But it looks like an extension to September 30 for closing is just about a given…just about.
Ardell this does look like a great deal for those not able to close in time. But it does have one more round of votes to go through before it’s a sure thing. Hopefully it will get voted on soon and pass the vote!! We’ll all keep our fingers crossed!!
I have one client that may be eligible for the $8,000 credit that he didnt’ think he would be because he was waiting to hear back from the bank on a short sale. H’es going to be excited if he gets it!
Hi Geoff,
I was trying to get some statistics on the potential to pass The House vote once passed by the Senate. Given this does not change the eligibility contract date from April 30, I have a strong feeling it will pass The House and make it all the way through.
I have but one client who will be impacted, and have warned them that this is not a done deal. But given we were 100% sure when we wrote the contract on March 23 that they would not be eligible…this is good news! There was never a possibility for their home to be built prior to June 30, August 30 is the proposed completion date.
So an extension to September 30 would do it!
I heard you on 1300 am today. Talking about future home prices. Did you say that home prices wont come back to the high’s b4 the housing crash until 2018 ? I own 11 rentals, I bought them 7 plus plus ago, and hanging in there. I plan on hold for a while or maybe in this market trade up or buy more, though I find it hard to get financing with so many poroperties.
Hi Steve,
Yes, I did say I did not expect peak pricing of Summer 2007 to return until 2018. I have a post I’ve been researching for days that I should have up here tomorrow regarding home prices over the next year or more. It does not suggest that waiting will bring better results price-wise, and it is more likely to go down from here…and significantly in some cases.
I’ll try to get it up in the morning, but I have an appointment…so it could be late afternoon.
For potential homebuyers reading this…this is NOT an extension for those who were not already IN CONTRACT prior to April 30. This only impacts those whose contracts are dated prior to April 30, who can’t close by June 30.
It is my understanding that this got tacked on to the $140 billion jobs and tax bill that the house needs to vote on.
All things considered I think this in and of itself will go through. My only question would if the bill it’s attached to goes through. But I think it will. So we can do a half jump for joy and finish it off once it’s in for sure! Regardless it’s great news!! 🙂
You would be correct Marcy.
I have fabulous clients, most always, who know how to apply the information. Here’s how they responded:
“This would be awesome! … Let’s hope it goes through.” wife
“Wow, I am not going to get my hopes up, but that would be sweet!” husband
I don’t think we withhold information until it is an absolute fact. There is too much joy in the hopeful portion of the eventual political time frame. 🙂
Too many people worry that the public will “assume” the best case scenario, if we release news “too early”. I do not find that to be the case.
The amendment to extend the closing deadline was attached to an unrelated bill (mostly extending unemployment benefits, some jobs creation stuff). That original bill already passed in the House. Assuming the amended bill passes in the Senate, then a joint House/Senate committee would have to reconcile the differences between the two versions, that reconciliation bill would then be voted on again in the House (possibly the Senate too if the reconciliation changes the Senate version) and then be sent to the President for signature into law.
At least that’s how I understand it.
All that being said, most of the political talking heads expect the closing deadline to be extended to Sept 30.
Thanks Jay. Any anticipated time for all of that to happen by? Will we know for sure in the next 30 days?
This is good news for people who have been rushing to close on time, but have run into “issues”.
Too bad the tax credit is gone. In Portland pending sales dropped by 50% in May after the tax credit expired. It looks like the tax credit just pulled forward pending sales from May.
This only gives banks more time to drag their feet since it is only offered to those in contract before the original expiration date.
If anyone was in contract prior to April 30 then I think it would be completely fair to make sure your eligible tax refund is given to you. You earned it.
The only potential problem I see with extending the close date so far out to September 30 is I can see people “back-dating” their contracts to before April 30. A big door will open to potential and massive fraud, I fear.
If there is a very lengthy closing time of more than 60 days, IRS should get a VERY good reason why like Short Sale or house was being built/new construction.
ARDELL – the Senate failed last night to get enough votes to stop a filibuster on the bill with the tax credit closing deadline attached. At this point, an extension appears dead. See http://tpreg.com/deQCbO
Thanks Jay. Kim told me when I woke up today. I will update the post to reflect that.
Tax Credit Extension looks like it is going to pass after all. Passed in the House by a huge majority as a stand alone Bill. Senate is expected to pass it within the next day or so. Stay tuned.
Passed both houses…awaiting President’s signature expected today.