By Corbett B. Daly
WASHINGTON | Fri Jul 2, 2010 3:11pm EDT
(Reuters) – President Barack Obama on Friday signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get a popular tax credit from the government.
Homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.
The measure is meant to support the battered U.S. housing market which still faces tough headwinds despite low mortgage interest rates.
The extension would not help anyone purchasing a home now, only those who already went into contract by April 30th but could not close in time for the original June 30th deadline. There’s some talk that this is an invitation to fraud. “The IRS reminds taxpayers that special filing and documentation requirements apply to anyone claiming the homebuyer credit,” said a spokesperson from the Internal Revenue Service.
This measure should not affect anyone buying in the Real Bay Area, despite real estate industry watchers claiming May’s terrible housing numbers are due to the tax credit’s April contact deadline. RBA buyers would not change their purchase plans due to a mere $8000 federal tax credit ($6500 for existing homeowners) and would not make their decision based on such a small percentage of the contract price. The increase in RBA sales this May over last confirms it, and let’s not discuss the California tax credit. Experts agree: everything is fine.