We’ve talked before about the federal first-time home buyer credit, and how this $8,000 tax credit can really be a wonderful opportunity for people who are looking to buy a home in Colorado. Well, we thought we’d take a moment to review how it’s been going, and talk about where things are headed now.
The program, as you’ll recall, provides a tax credit of 10% on the purchase of a new home, up to a maximum of $8,000. So, if you buy a new home for $65,000, you will qualify for a credit of $6,500. The program is available only to people who have not owned a principal residence for three years before the home purchase.
According to US News & World Report, nearly one and a half million people have taken advantage of the first-time homebuyer tax credit so far. Around 40 percent of all home sales have fallen into this category. The tax credit has been just the push that some folks needed to take the leap and sign on the dotted line to buy their new home.
This has caused an increase in home sales in certain categories. The program caters to starter homes, and these types of homes are selling much better right now than other types of homes, although the credit does apply to other homes, too.
Real estate agents in Denver have noticed an increase in activity and interest, as well. People are looking at that looming deadline in November, and they’re rushing in to find out what they can do to get it before it’s too late. While July and August tend to be the biggest months in terms of new home sales, it is expected that this year September and October numbers will very likely rise above the earlier months.
The deadline for the federal first-time home buyer credit is November 30, so if you’re thinking about buying a new home now is the time to get moving. Most experts suggest that you try to get everything signed by the 31st of October at the latest, as your closing can take several weeks. While there is some discussion among lawmakers about extending the program, the fact of the matter is that waiting to buy until December or later could cost you as much as $8,000 in tax savings.
