- First time home buyers can now receive an $8,000 tax credit through April 30, 2010
- Home buyers who have lived in their residences for five years may now receive a credit of $6,500
- The tax credit is now available to individuals earning up to $125,000, or $250,000 for couples
Today President Obama signed into law a bill that extends the $8,000 home buyer tax credit to April 30, 2010. Income limits for eligible home buyers have been increased to $125,000 for singles and $225,000 for couples. The new bill also expands the tax credit to include home owners who have lived in their primary residence at least five of the last eight years. Existing owners who sell their current home and make a home purchase will earn a tax credit of $6,500. Qualifying homes must have a purchase price at or below $800,000.
As the original November 30th deadline of the tax credit approached, many industry leaders and experts expressed a strong desire for an extension. The National Association of REALTORS® (NAR) forwarded more than 500,000 letters to congressional leaders and last week made close to 13,000 calls to Senate offices in an attempt to garner necessary support for the bill. Sen. Johnny Isakson (R-Ga.), who played a key role in pushing the original tax credit through Congress, also made a significant contribution to the extension.
This new legislation comes one week after the House and Senate passed legislation to extend the current loan limits for FHA, Freddie Mac and Fannie Mae through December 31, 2010. Current loan limits of 125% of local area median home prices (with a cap of $729,750) would have expired on December 31, 2009. Had this extension not been passed, many markets would have experienced a reduction in case loan limits.
NAR economists estimate that approximately 2 million people will take advantage of the tax credit in 2009.
