Here’s the info about the proposed new tax credit from the government.
The new administration in the White House has a plan to help rejuvenate the economy that includes the potential for a $15,000 first-time homebuyer tax credit. For this to apply to you, it means you can’t have owned real estate in the last three years. This credit is meant to help with your down payment.
When you look back at the old tax credits in 2008 when we had the real estate slump, there was a $7,500 to $8,000 first-time homebuyer tax credit, and you had to file your taxes after you bought the home to get that money back. So the proposed new tax credit is significantly different than back then.
In the real estate industry, we’re seeing so much buyer demand right now that we can’t handle a tax credit like this in our marketplace. We would have more buyers coming out to buy more houses because $15,000 is a large incentive. For example, with that credit, you could put 10% down on a $150,000 property. If we had that much more demand, our appreciation would skyrocket. With prices increasing that much, we would see a much tighter market than what we currently have, and what we have now is very tight already. Even without a first-time buyer incentive, it’ll continue to be tight for the foreseeable future.
However, this plan has to make it through Congress, and the president has to agree to sign it, so whether this will apply to us is yet to be seen.
If you have any questions about this tax credit or how to win in a multiple-offer situation (which we’re seeing more of because of all the demand), please feel free to reach out to our team via phone or email. We would love to help you.