First time home buyers and others can celebrate soon. There's movement to extend and expand the first time home buyer tax credit. But wait, there's more. The new and improved home buyer's tax credit will be expanded to include higher income earners and existing home owners. The fragile real estate may have hit a jackpot as the expanded and improved tax credit was surely supported by the real estate industry and residential mortgage brokers. It's the new and improved home buyer tax credit.

Senate negotiators announced during the last week of October that they had come to an agreement on extending and slightly expanding the extremely popular $8,000 first time home buyer tax credit.

The existing $8,000 first time home buyer tax credit will be extended until June 30, 2010, for contracts that are finalized by April 30. Homeowners who lived in their homes for five consecutive years over the past eight years, will get a tax credit of up to $6,500 as long as they finalize their home purchase contract by April 30 and close by June 30.

Members of the Armed Forces who are on active duty for at least 90 days in 2008 or 2009 have until April 30, 2011 to claim the tax credit as either first-time buyers or trade-up buyers.

To protect against fraud, you must be 18 years of age or older to claim the credit (a 4-year old had claimed the credit as a first-time buyer because her parents already owned a home), and a HUD-1 settlement statement must be attached to the tax filing. Finally, the IRS will have greater oversight during the processing of forms, rather than waiting to audit them.

The income limits for the tax credit have been raised to $125,000 for individuals and up to $225,000 for married couples.

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