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Senate Approves Extended U.S. Homebuyer Tax Credit

By
Real Estate Agent with Berkshire Hathaway HomeServices NJ Properties

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Senate Approves Extended U.S. Homebuyer Tax Credit

Sent to me from Weichert Financial Services, authored by Brian Faler

Nov. 4 (Bloomberg) - The U.S. Senate approved a $45 billion plan to expand a tax credit for first-time homebuyers, extend jobless benefits and provide tax refunds to money-losing companies.

Lawmakers voted 98-0 for the measure, sending it to the House, where Majority Leader Steny Hoyer of Maryland said in a statement it will receive a vote as early as tomorrow. The bill then would be forwarded to President Barack Obama for his signature.

The plan would be the first major extension of provisions in February's economic stimulus plan. The $8,000 homebuyers' tax credit, slated to expire this month, would continue until April 30 and be expanded to include people with higher incomes and some who already own homes. That would cost about $10 billion in the fiscal year that began Oct. 1, according to Congress's Joint Committee on Taxation. 

The Treasury Department estimates that more than 1.4 million Americans have taken advantage of the homebuyer credit at a cost so far of about $10 billion.

Increased Credit

The Senate plan would allow homebuyers who have lived in their residence at least five years to receive a $6,500 credit. Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify. That is up from the current $75,000 limit for individuals and $150,000 for couples.

Those buying homes worth more than $800,000 wouldn't be eligible for the credit. Those who sell their new home or stop using it as their main residence within three years would have to repay the credit. 

Last Updated: November 4, 2009 18:03 EST

(Excerpts taken from www.bloomberg.com)

Judi Boad
SOLUTIONS REAL ESTATE - Scottsdale, AZ

HOORAY!!! Great news!

Nov 05, 2009 03:52 AM
John Cope
WEICHERT, REALTORS® - Porter Properties - Auburn, AL

Several good ideas in the extension.

1.  Plan ends with two dates.  Contract by April 30, 2010 and Close by June 30, 2010. This should help the problem we were fixing to have with loans closing by the end of November so people could move in by 11/30/09.

2.  For our honored service men that are out of the country for 90 days between 1/1/09 and 6/1/10 they can claim the credit until June 30, 2011.

3. New $6,500 credit for someone who has lived in their house for 5 of the last 8 years is great, but in this market, 6 months is a pretty short time for someone to sell their current house and buy another one.  But it will be fun to try to help them.

Still a few questions.  What does the new language about contract date and closing date do to the old concept of having to actucally move in, so the new house was your primary residence?

Nov 05, 2009 04:06 AM
Ron Brown NMLS #270845
NMLS ID: 40831 - Federal Way, WA

Lets all keep our fingers crossed that the House puts this up for a vote quickly so we can stop guessing at what will happen.

Nov 05, 2009 04:18 AM