Today, the U.S. House of Representatives voted 403 to 12 to extend and expand the home buyer tax credit. The bill passed the U.S. Senate late yesterday and now will 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 credit of up to $6,500. Existing homeowners will be eligible for the $6,500 if they have lived in their current residences for at least five years. The bill also will increase the qualifying income limits from $75,000 for single 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.
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 remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.
What does this mean for you? If you are a first time buyer that $8000 tax credit can help off-set your closing costs. If you are a current home owner in a house that is squeezed for space, you can get a tax credit of $6500 to move into a larger house. Everyone wins here if you don’t wait too long to do this. Yes, this is coming at the end of the year making it more difficult to find a good house with fewer available to choose from, but if you’re serious about making a move and have owned that current house for 5 years, call us and we’ll walk you through what you need to do.