Home Buyer Tax Credit Extended

The much-anticipated extension to the home buyer tax credit has finally been approved. The Senate's vote yesterday resulted in a 98-0 win and today it was passed in the house. The bill now moves to the President's desk for a final signature. There is no way it will not be signed. First-time home buyers have been eligible for a tax credit of up to $8,000 since last January as part of this year's economic stimulus package. The newly backed program will expand the credit to include existing home owners. This will help people sell their smaller home that is in high demand and move up to the next higher price range. Great news! Under the revised program, those who have owned a home for at least five years will be able to apply for tax credits of up to $6,500 when they purchase their next home. To qualify, buyers will have to sign a purchase agreement by April 30, 2010 and close by June 30. The maximum purchase price on a home will be $800,000 with vacation homes not eligible. Income limitations are $125,000 for single tax payers and $225,000 for joint filers. The National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) have been lobbying hard for the extension and expansion of the tax credit. NAR claims that so far, about 1.4 million first-time home buyers have qualified for the program and they estimated that 350,000 of these buyers would not have otherwise purchased. I say hogwash. The buyers in this area have bought because homes are now affordable. The tax credit does give them a push to do it now. The tax credit is also set to be extended for another year for military personnel serving outside of the United States until June 30, 2011. Senator Johnny Isakson, who heavily pushed for the extension, along with his own version that would have increased the credit to $15,000 stated, "This is probably the last extension." I think this is also good news since if people understand that the tax credit is over at the end of this extension, Buyers will get out there and find a home. This will help rock this spring’s market!