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Did First Time Buyer Tax Credit Help Sellers?

Monday, September 28, 2009 posted by Tommi Crow

The $8000 Tax Credit for first time home buyer’s (people who have not owned a home in the last 3 years) expires on November 30, 2009.    With the expiration date drawing near, the Realtor and builder lobby groups are pushing lawmakers to extend the program for another 6 months.   If they are successful, it will cost taxpayers of nearly $15 BILLION.  

“Yea” or “Nay”???    Before we cast our vote, we decided to find out whether the tax incentive successful or not?  Specifically, did it persuade people to jump into the market?   Would it be a good investment for taxpayers going forward?

According to a poll conducted by Zillow, the tax credit was persuasive.

  • 18 percent of home buyers said the tax credit was the main reason they pushed to buy a home before November 30, 2010.
  • Based on the number of first time buyer’s in the marketplace, a 6 month extension could persuade another 335,000 (18 percent) buyers to buy a home of their own.
  • If the first time buyer credit is extended, home sales would likely increase 5 percent.  Without it, sales would be down as much as 2 percent.
  • Only 31 percent of first time buyers said the credit had no influence on their decision to purchase. 
  • 69 percent of buyers said the tax credit was important in motivating them to buy a home this year.

Thank you for visiting homes for sale and rent website.  If you have an opinion about extending or expanding the tax credit for homebuyer’s we would love to hear from you.  Click the Comment link below.   Your privacy is completely protected.