Home Buyer Tax Credit Expanded

Today, the U. S. Senate voted overwhelmingly to expand a first-time homebuyer tax credit to include a far larger pool of people entering the dormant housing market. This legislation now goes to the U. S. House of Representatives, which is expected to quickly approve the measure and send it over to the President for his signature.

The $8,000 tax credit for first-time homebuyers, enacted as part of the stimulus package last February, and set to expire on November 30th, would be extended and expanded to include a $6,500 credit for people who have lived in their current residence for 5 of the prior 8 years. Move-up buyers don’t have to sell their current home to qualify for the new $6,500 credit, but the money cannot be used to purchase a vacation home – it’s only for a primary residence!  Homes must cost less than $800,000 to qualify for this program.

The legislation would extend the $8,000 tax credit and expanded $6,500 credit through June 30, 2010, as long as the Buyer enters into a legally binding contract before April 30, 2010, and closes by June 30th.  It also doubles the income ceiling for qualification to $125,000 for individuals, and for joint filers with incomes above $225,000.