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Tax credit gives boost to home buyers

November 8, 2009 12:00:00 AM PST
Homebuyers are getting some help thanks to the economic stimulus bill which was signed into law this week.The tax credit is set to expire at the end of this month, but thanks to the new bill it will be available through the middle of next year.

Also, more people are eligible.

Earlier this year, Darren Beasley, his wife and three daughters moved into a home at the end of Creekwood Court in Riverside.

"I'm on a cul-de-sac; it's great we have a super house. I got no complaints," said Beasley.

But it might have never happened without the $8,000 federal tax credit for first-time homebuyers, which was the real motivator in getting them to buy.

"The $8,000 was a bonus; we were like what the heck that's perfect," Beasley added.

But now, what's perfect for first-time homebuyers will also be perfect for existing homebuyers.

Besides extending the $8,000 tax credit for first-time buyers, the government is giving a $6,500 tax credit for existing home-owners, if they buy a new home by May 1.

"I think anything that's going to stimulate real estate or business is outstanding, and it should get someone who's on the fence thinking should I buy or should I sell will probably give them an extra push to go forward," said realtor Ted Jenkins.

But Jenkins says it might not be as easy as it sounds.

Take Darren Beasley's situation for example.

Because of the market right now, it was tough to get an offer approved.

And "no home" would have meant "no tax credit."

"It was kind of discouraging because we were writing so many offers, and we were like gosh, are we going to ever going to get a house, and then the deadline was coming closer and closer and we were starting to get worried that we wouldn't be able to get the house closed by the time the deadline transpired," said Beasley.

This program would cost the federal government almost $11 billion in lost tax revenues, but if it gets properties off the market, many say it will all be worth it.


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