Update November 6th: This bill is now signed into law. The extension for this credit is until April 30, 2010, with a 60-day extension if a contract is entered into before that. First time buyers, this is your big chance! Repeat buyers who currently own now have a great incentive also!
The United States Senate passed a resolution on October 29th to extend the $8,000 first-time homebuyer tax credit originally set to expire on November 30. Once the Senate officially votes on the bill it will move to the House of Representatives, which strongly supports the extension. The Obama administration has also signaled its strong support for an extension of the tax credit.
Aside from the first-time homebuyer credit, the new plan would offer a $6,500 credit for repeat or move-up homebuyers who have lived in their primary residence for five years or more. The tax credits would be available to buyers who sign purchase agreements on a new or existing principal residence, not over a selling price of $800,000, between December 1, 2009 and April 30, 2010, and who will close escrow before June 30, 2010.
The income limits for all buyers would be increased from the present levels to higher incomes of $125,000 per year for individuals and $225,000 for married couples.
The first-time homebuyer credit is also available to those who have not owned a home in the previous three years. The credit does not have to be repaid unless the home is sold or ceases to be the primary residence within three years.
According to the Treasury Department, more than 1.2 million borrowers have claimed $8.5 billion of the $13.6 billion set aside for the first-time homebuyer tax credit.
A California Association of Realtors survey of first-time home buyers shows that 40 percent would not have purchased a home without the tax credit.
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