Federal Home Buyer Tax Credit Set to Expire
The $8,000 federal tax credit available to first-time home buyers is set to expire on November 30th of this year. The looming expiration date has home buyers and agents scrambling to get deals done while the credit is still available.
The rebate, passed as part of February’s stimulus package, is available to anyone who has not owned a home in the last three years. Several studies have shown that the program has spurred several hundred thousand home sales in the short time it’s been available.
The real estate industry is pressuring Congress to extend the rebate offer through at least next summer to prop up an improving, though still unsteady housing market. Approximately 1.8 million people are expected to get the credit.
However, critics argue that the money is going to people who would have bought homes anyway. According to Ted Gayer, a Brookings Institution housing economist, 85% of the rebate recipients were already going to buy houses. The program is on track to cost the government $15 billion.