Obama Signs Homebuyer Tax Credit Extension

November 9, 2009

Housing Tax Credit Extension is Passed

It’s official! On Friday, November 6th, 2009 - President Barack Obama has signed a $24 billion economic stimulus bill that gives tax incentives to prospective homebuyers. In a rare bipartisan agreement, the US House of Representatives have voted 403-12 to extend and even expand the homebuyer tax credit.

The extension will now last until April 30th, 2010 and amount of credit is $8000 (or $4000 if married but filing separately). In addition to the extension, the bill will also include a tax credit for current home owners as of December 1st, 2009 to April 30th, 2010. The credit amount is $6,500 (or $3,250 if married, but filing separately).

Similar terms and conditions will still apply. For example: the homeowner must have used the home as a principal residence consecutively for 5 of the previous 8 years and the home purchase agreement must be signed no later than April 30, 2010, however the purchaser will have until July 1, 2010 to close. Income restrictions were also raised and are now listed at $125,000 if single, or $225,000 if married. The bill also includes a limitation on the purchase price of the home - up to $800,000.00

The White House released a statement which says the new law also includes tax credits for struggling businesses and unemployment extensions and will build upon the stimulus package from last February for $787 billion. It is their hope that this tax credit will help struggling families (many of whom have suffered job loss within the past year) avoid foreclosures on their homes.