Home Buyer Tax Credit Extended

The House and Senate has voted to extend the first time home buyer credit that was going to expire on November 30, 2009. President Obama is expected to sign the bill into law sometime today.

The $8,000 credit for first time home-buyers, which includes anyone who hasn’t owned a home in the past three years, has been extended to April 30, 2010. In order to receive the credit you must sign a sales contract by April 30 and close on the home by June 30, 2010.

The National Association of Realtors lobbied successfully to have the credit expanded to include other home owners to help fuel home sales. The credit has been expanded to include a $6,500 tax credit for anyone who is buying a home that has owned the current home for at least five years.

The renewed and expanded tax credit along with current low mortgage rates gives potential home buyers a powerful incentive to purchase a home. Hopefully the housing market will continue on the path to recovery. Many people in the industry were worried about housing market after the credit expired in November.

The tax credit doesn’t include vacation homes and is only for a home purchase that will be your primary residence and costs $800,000 or less.The credit is also phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

If you’re in the military serving outside the United States for at least 90 days, the tax credit is extended for another year.