First Time Home Buyer/ Existing Home Owner Tax Credit Extended and Expanded

In case you did not see, the $8,000 First Time Home Buyer Tax Credit has been extended until April 30, 2010.  In a previous post, I described this goal and also mentioned the issue with being under contract versus closing.  When extending the tax credit for first time home buyers, Congress also changed the terminology.  As mentioned before, the closing requirement could force first time home buyers to make negative concessions to make sure they close in time to receive the tax credit.  Now, the house need only be under contract by April 30, 2010 to receive the tax credit – with a closing deadline of June 30, 2010.  This makes a lot of sense because it will not put undue pressure on first time home buyers making their first and potentially largest transaction to make concessions in order to keep the tax credit.  Going forward, the income limits have also been increased to $125,000 for single tax payers and $225,000 for married tax payers filing jointly.

Congress did more by expanding the tax credit to repeat or existing home owners and allowing a $6,500 tax credit to repeat or existing home owners who purchase a house during the same time frame.

The general hope is to encourage home sales through the Winter, which is traditionally a slower season for home sales, and by Spring/Summer 2010 the housing markets start to pick-up on their own.

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