Tax Credit Headed for Extension (and Expansion)

The Senate acted on an important procedural step that clears the way for the extension of the home buyer tax credit. If all goes as planned, the extension should move its way to enactment in the next week or two.

The program was set to expire December 1, 2009. The extension will keep the credit in place through next spring. When enacted, the tax credit will be available for primary residence purchases that are under contract by April 30, 2010 and close by June 30, 2010.

The original tax credit was aimed at just first-time home buyers, and offered them a credit of 10% of the purchase price to a maximum of $8,000. The version of the credit making its way through Congress now keeps that credit in place, but it will now cover some repeat buyers as well.

The new tax credit will be available to buyers who have owned a primary residence for five consecutive years out of the last eight. The credit amount will be $6,500.

Qualifying income limits for both the first-time buyer credit and the repeat buyer will be raised to $150,000 for single tax filers and $225,000 for joint filers. That will cover a lot of buyers in our region.

We will keep you posted on the progress as the extension and expansion of the program makes it through Congress.