Homebuyer tax credit extension and expansion update

On November 6, President Barack Obama signed into law the extension and expansion of the current homebuyer tax credit, an important step in ensuring a real estate and economic recovery. The measure extends the present $8,000 tax credit program for first-time homebuyers through April 30, 2010. It expands the program, effective November 7, 2009, to include current homeowners, who are now eligible for an up to $6,500 tax credit (10 percent of the purchase price) through April 30, 2010 provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years. If potential homebuyers have a binding contract on or before April 30, they will have until June 30 to close the transaction. Income limits for eligible homebuyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return. Click here for detailed information about the legislation. NYSAR recommends that REALTORS advise their clients and customers to consult with their own tax professional regarding the application of the credit.