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  Homebuyer Tax Credit Update

The Economic Stimulus Bill (The American Recovery and Reinvestment Act of 2009, H.R. 1.) was signed into law on February 17. Many elements of NAR's housing agenda were included, including an $8,000 first-time homebuyer tax credit. Originally available only through November 30, 2009, Congress has voted to extend and expand the homebuyer tax credit to continue to stimulate housing and improve our economy.

Under the bill:

• the current $8,000 tax credit for first-time homebuyers has been extended through April 30, 2010
• current homeowners are now eligible for a $6,500 tax credit through April 30, provided they've lived in their existing home as their principal residence for five consecutive years in the past eight years
• if potential homebuyers have a binding contract on or before April 30, 2010, they have until June 30, 2010 to close the transaction
• the annual income limits for full-credit eligibility are raised from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples. Buyers with incomes $20,000 higher than these limits may qualify for a partial tax credit. These income limits apply for BOTH first-time buyers and current homeowners.

For more information about the extended and expanded tax credit, including a comparison chart and Frequently Asked Questions, go here for info posted on realtor.org.

The National Association of Home Builders has posted a list of FAQs here and this video which also addresses common questions:

Other key points of the legislation:

The $6,500 tax credit for eligible existing homebuyers went into effect immediately after the President signed the legislation earlier today. All closings taking place from November 7, 2009 until the deadlines above qualify for the tax credit.

Existing homeowners do not need to sell their current home to claim their credit, but they must occupy the new home as their principal residence. They can keep their current home as an investment property or second home.

To listen to a special podcast from NAR President Charles McMillan, go here.

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  11:37 AM