1st-time buyers take $7M in tax credits
Hawai'i first-time home buyers claimed $7,146,716 in tax credits for homes purchased last year, according to recently released data from the U.S. Treasury Department. Overall, 951 claims were made though Feb. 28 for the first-time home buyer credit, which was expanded under last year's American Recovery and Reinvestment Act.
The stimulus program expanded credit, which was worth 10 percent of the purchase price of the home, or a maximum of $8,000 to first-time buyers or up to $6,500 for repeat buyers. The credit was initially offered for purchases before Dec. 1. Congress later extended the deadline, making taxpayers eligible for the credit if they had a binding contract to purchase a home before May 1. Those buyers must close on the home before July 1.
The credit helped pump up demand for homes.
In April, single-family home sales surged 52.9 percent to 286, from 187 a year earlier. Condo sales jumped 48.3 percent to 390, from 263 in the same period.
It's unclear how many of those sales were spurred by the tax credit program, and whether the end of the program will cause sales to fall.
Some economists say stimulus programs can have the effect of advancing sales that would have occurred later had there been no stimulus. If that is the case, there could be a drop in sales activity after the stimulus is gone.
In one sign that sales could see a dip ahead, the number of home purchases that were pending in April was down sharply — 60 percent — for single-family homes compared with sales pending in April 2009. Condo purchases pending in April were down 22 percent.