The Home Buyer Tax Credit is no longer front page news but that doesn’t mean it should be forgotten. Under the current rules, enacted in November, a first-time buyer or qualifying repeat buyer, must be in contract by April 30 and close on the property before July 1. The income limits changed from the original version, a cap was placed on the the property price (not loan amount) for the $6500 credit, and someone that is claimed as a dependent can not claim the Credit. As always, if you have tax related questions, contact a CPA.

How does the Credit affect Portland real estate? In my opinion, not much. Yes, it has been a contributing factor but I don’t think it has been the savior that some cite and I don’t think the market is going to crash and burn when the Credit ends. The Credit is significant for those that qualify or decide to purchase because of it but it is not significant to the long term. NAR cited roughly 350,000 houses sold last year because of the Credit (that’s not the number of people that qualified but the number that would not have purchased had the Credit not existed). There are roughly 1 million licensed Realtors. Do the math.

If I was a buyer or seller? The Credit is a bonus. If I was planning on doing something in the first half of the year, I would do it now to take advantage of what is essentially free money. “I’m selling, it doesn’t do me any good.” Sure it does. Your house is $8000 more attractive on April 30th than it is on May 1 to certain segment of the market. If you qualify for the $6500 there is potentially $14,500 worth of Credit in the two transactions.

If I thought the market was going to drop 3% I’d be better off waiting if I was looking at roughly the average home (3% of a $300,000 house is $9,000). Some may consider the Credit as an “insurance policy” against a possible slide? The Credit is cash in your hand (once you file) versus theoretical paper money. Ultimately you have look at your situation, talk to advisers and go from there.