Are you planning on buying or selling a house in the next few years? Biden’s proposed tax plan can massively change the real estate market for years to come!
Here are three things you need to know about this proposal so you can be a more informed buyer or seller.
And, this is just a proposal. It still needs to be adopted before becoming law.
1- Anyone who is a first time homebuyer or has not owned a home in the past 3 years will qualify for up to $15,000 to help purchase a home.
Many struggle to save enough money to pay for all of the expenses associated with buying a home. With the affordability of the St. Louis homes, many will now be able to afford the down payment and closing costs required to buy a home.
2- The tax credit would likely show up on your closing statement.
During the Great Recession, there was a $8,000 first time home buyer tax credit created to increase the number of people eligible to purchase a home. Thereby increasing the demand for housing when supply was at an all time high. The execution of this program was not ideal. It didn’t help those who needed the cash when buying the home because they receivedthe money on their tax returns, not when actually buying the house.
Biden’s tax credit is said to be an advanceable tax credit. Meaning it could be applied to your closing statement. Your closing statement tells you how much money you need to bring to close on a home.
3- This will be great for people struggling to find enough money for a down payment but, it will most likely increase competition between buyers.
Demand is already at an all time high with an extremely low inventory of houses on the market. There are more people wanting to buy houses than there are houses available to buy! This tax credit would allow even more people to afford purchasing a home, creating even more demand and competition between buyers.
If you bought your home in the last few years and are upset about not getting this credit, it might be a blessing in disguise because it could become even more difficult to buy a home.
If you’re looking to buy a home in the next few years; regardless if this tax credit is available or not, your offer will need to stand out even more! At the Hartmann Home Team, we have the knowledge and expertise to have your offer stand out. So you’re not standing out in the cold and instead get to cozy up in your new warm home.