One Step Closer - Extending the First Time Home Buyers Tax Credit

Look for the First Time Home Buyers Tax Credit to be extended and expanded later this week after a procedural vote yesterday in the Senate. Being included as an amendment to the bill extending Unemployment Aid, the Senate is close to finalizing the bill to be voted on later this week; with the House expected to quickly approve the bill without adjustments. Here is the basics of what to expect coming from Congress according to the National Association of Realtors:

• Credit available for purchases before May 1, 2010. Prospective purchasers with binding contracts in place as of April 30, 2010 will be allowed an additional 60 days to complete the transaction.
• Credit remains at $8000 for first-time purchasers. No change to definition of first-time purchaser.
• New $6500 tax credit for repeat buyers who purchase between December 1, 2009 and May 1, 2010. Repeat buyers must have lived in their homes consecutively for 5 of the previous 8 years.
• Income limits are expanded to $125,000 on a single return and $225,000 on a joint return. Current law $20,000 phase-out retained.
• New anti-fraud limitations are imposed.