Home Buyers Rushing to Meet Sales Tax

Some home buyers who rushed to sign sales contracts to meet an April deadline for an up to $8,000 tax credit, may not get their money after all. Deadline to claim a federal tax credit as banks and title companies deal with a crush of closings.

Home buyers hoping to get the tax credit have until June 30 to close their deals. But the U.S. Senate failed to pass a bill that contained an amendment that would have extended that deadline to Sept. 30. The real-estate industry stepped up calls for an extension of the closing deadline in recent weeks amid concerns that some buyers might miss the deadline after a last-minute home-buying rush led to bottlenecks at banks, appraisal firms and title insurers. The Post-Standard last week said they have clients who won’t close before the deadline.

The American Recovery and Reinvestment Act of 2009 offered first-time home buyers an $8,000 credit for purchases made before Dec. 1, 2009. Then Congress passed a second law, the Worker, Home-ownership and Business Assistance Act of 2009, which extended the deadline to April 30 and added a $6,500 credit for repeat home buyers. Buyers had to close their deal by June 30. But a Senate bill that included the extension failed to secure enough votes last week and has been shelved.

The National Association of Realtor said that as many as 180,000 contracts that were signed by April 30 might miss the June 30 closing deadline. But it is unclear how many of those sales won't happen as a result of missing the tax credit.