The federal government recently announced it is offering significant tax credits to both first-time and experienced home buyers.

(File photo)

The credits come on the heels of a successful incentive program previously aimed at first-time buyers.

Not just for first-time buyers

With the new incentive, first-time buyers are eligible for up to $8,000 in tax credits and other buyers are eligible for credits worth up to $6,500. Parties must sign an agreement of sale by April 30, 2010, and settle by July 1, 2010.

“The previous tax incentive spurred a lot of sales,” says Jim Kelly, regional vice president of sales with Erickson Retirement Communities. “We’re expecting this credit, now open to those who have owned a house for more than five years, to keep the market improving.”

According to the National Association of Realtors, the previous, more restrictive tax incentive spurred a 7.4% increase in existing home sales in the month of November. NAR’s chief economist, Lawrence Yun, says the new tax credit should stimulate even more activity.

“This clearly was a rush of first-time buyers not wanting to miss out on the tax credit, but there are many more potential buyers who can enter the market in the months ahead,” he says. “We expect a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit.”

Good time to sell

Kelly adds, “If you’ve been considering a move in the past couple years, I don’t think you could find a better time to sell.”

For more information about the tax credit, go to: www.irs.gov or www.Realtor.org.

mark.abromaitis@erickson.com