First-time homebuyer credit extended

Congresswoman Niki Tsongas informs us that an extension of the first-time homebuyer tax credit, scheduled to expire on November 30, 2009, has been extended by the House and by the Senate to June 30, 2010. The bill awaits the President's signature which should occur within the next day or two. As it was configured, this bill offered a tax credit of up to $8000 to a first-time home buyer as a means of stimulating home sales but it was only available to those who closed on their deals by the end of the day on November 30.

The new bill not only extends that deadline, it also expands the credit to many existing homeowners (and not just first-time buyers). Under the new bill, individuals who already own a home and have lived in it for at least five consecutive years are now eligible for a tax credit of up to $6500. Other changes include the ability of people who purchase the home in 2010 to claim the credit on their 2009 tax returns, meaning they would get the money (the "credit") sooner rather than later. Income caps have also been raised. Formerly, the credit was limted to those with income less than $75000 for individuals and $150000 for couples. The new limit is $125000 and $250000, although homes with a sales price in excess of $800000 would not be eligible for any credit. Finally, the deadline has been moved to April 30, 2010 (for an executed P&S) with a closing to occur no later than June 30, 2010.