The U.S. House of Representatives
passed a bill extending and ex-
panding the Federal Tax Credit for
First-time Home Buyers on Novem-
ber 5th. The bill was passed in the
U.S. Senate the day before and will
now go to President Obama for his
signature, where it is expected to
be signed this week.
The tax credit will be extended
through April 30, 2010, with a 60-
day extension if a binding contract
is in place prior to the deadline.
First-time home buyers will continue
to receive a tax credit of up to
$8,000, while existing homeowners
will receive a reduced credit of up
to $6,500. Existing homeowners will
be eligible for the $6,500 if they
have lived in their current resi-
dences for at least five years. The
bill also will increase the qualifying
income limits from $75,000 for sin-
gle tax filers and $150,000 for joint
filers, to $125,000 and $225,000,
respectively. The purchase price of
the home is capped at $800,000.
The changes, among other things,
are aimed at encouraging so-called
“move-up buyers” to sell their first
homes and buy a larger or more
expensive place.
Under additional provisions in the
bill, taxpayers can claim the credit
on purchases completed in 2010 on
their 2009 income tax returns. The
bill maintains the provision that
home buyers do not have to repay
the credit provided the home re-
mains their primary residence for 36
months after purchase, and waives
this requirement for active duty
military personnel who move due to
a military order. “The success of the home buyer tax
credit and its positive impact on the
real estate market is clear,” said
C.A.R. President James Liptak.
“According to our research, nearly
40 percent of first-time buyers said
they would not have purchased a
home if the federal tax credit for
first-time home buyers was not
offered. This underscores the sig-
nificance of the federal tax credit to
the housing market’s recovery in
California.
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