The real estate began to slow down when the mortgage industry had troubles and the house values suddenly dropped. Since this is one of the biggest contributors in the Gross Domestic Product, the government had to find ways to boost it again. 

Real estate is not the only source of the government’s income but it is also the source of jobs for many people. If this continues to drop, many people would become unemployed. House values continue to decline. Moreover, the US economy will be in big trouble. 

In an effort to boost the real estate sector, the government has implemented the American Recovery and Reinvestment Act of 2009. This entitled first-time homebuyers to avail of as much as $8,000 tax credits. 

Details of the Program 

This program was made for first time homebuyers of newly constructed or resale properties, who made their purchase beginning January 1 until November 30, 2009. To be considered as a first time homebuyer, a person must not have not owned a property as a principal residence for a period of three years prior to date of purchase. If qualified, the taxpayer will be entitled to a 10% of the home’s purchase price tax credit or a cap of $8,000. However, there may be partial tax credits due to those who have gone beyond the lowest income limits and there will be none for those who have exceeds it. 

The program is about to end as the last date of purchase should be made before December 1, 2009. This means any transactions not closed after November 30 will already forfeit the benefit. 

To extend or not to Extend 

The program had such a positive effect to the real estate market. People are really buying homes to avail of the benefit. Even the IRS could attest to this as they declared over that there over 1.4 million taxpayers who are qualified to make the claim. And this was reported as of the middle of September. 

Because the program has helped in the progress of the real estate sector, many individuals and even lawmakers are pushing for its extension. There have been so many speculations on the effects if it was discontinued. The real estate sales could drop easily. Many people would lose employment opportunities. Moreover, people would lose the chance of getting thousands of dollar savings from home purchase. 

True there are so many benefits if this program is extended. However, there are also speculations as to its negative impact to the other sectors of the economy. For one, the budget for the other industries may be compromised. This could lead to their decline, if a bigger portion of the country’s budget would allot to the real estate industry. 

From the looks of it, the benefits of extending the program, outweighs its costs. Well, it will all be up to the government to find the optimal program to boost real estate market without having to sacrifice other sectors. 

As for the people, everybody continues to hope for its extension. The outlook seems good and there may be some changes in the program for its betterment.

By: Katrina
Condos for sale in Westchester

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