Downsizing, Market Update, Trends

Another $8K Tax Break Extension Idea

Every day there are more rumors about ideas floating around in the Senate to extent the tax break.  Some make sense, some smell of compromise.  Below is today’s latest. I like the idea of extending it to buyers who “move up” after owning for 5 years, but why just “move up” buyers? Do they mean you have to buy a more expensive house? What about “move down” buyers who want to get into a home that makes more sense for them?

Senate Dems on Board with Credit Extension
Senate Banking Committee Chairman Chris Dodd (D-Conn.) says Senate Democrats have agreed to extend the first-time home buyer tax credit. The latest version extends the program to home sales signed — not closed — by April 30. Purchasers would have another 60 days to close the sale. The credit will also be expanded to include so-called step-up buyers who have lived in their current home for at least five years.

The credit would be cut nearly 10 percent to a $7,290 cap. Income eligibility for first-time home buyers would stay the same, but it would rise for step-up buyers to $125,000 for individuals and $250,000 for couples.

Source: Bloomberg News, Dawn Kopecki and Ryan Donmoyer (10/27/2009)