After a unanimous vote in the Senate and an overwhelming vote in the House - President Barack Obama signed into law an extension to the first time Home Buyer Tax credit.
First Time Home Buyer Tax Credit important datesThe credit has been extended until April 30th 2009 for a home buyer to be “under contract”.They must close no later than June 30th, 2009. This is for home buyers who have not owned a home in the last 3 years.
Current Home Owners can also receive the creditFor Homeowners who have lived in their primary residence 5 of the last 8 years and meet all the other requirements a smaller $6500 tax credit will be available for a new purchase.
Increased Income LimitsAnother major change to the tax credit is the raising of the income limits.The original tax credit set had income limits $75,000 for a single person and $150,000 for married couples. Now the income eligibility limits are increased to $125,000 for singles and $225,000 for married couples.
I am pleased that that the tax credit was expanded and extended. The US housing market is clearly still in crisis in many, many parts of the country and the situation is much worse than we even realize due to the shenanigans of the banks. I am referring specifically to the illegal practice of not foreclosing on homes that have received foreclosure notices for the express purpose of avoiding write-downs that will negatively impact the banks' balance sheets. The tax credit and tax expansion at least gives the housing market a fighting chance to reduce the onslaught of additional inventory that will inevitably hit.
There are a lot of great things that came from the extension of the tax credit. I think that after the first of the year home sales will increase after the first of the year.
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