Congress Extends and Expands Homebuyer Tax Credit

On Nov. 6, President Obama signed legislation that extends and expands the homebuyer tax credit. Now, for the first time, the credit is available to current homeowners as well as people purchasing for the first time.

The first-time homebuyer tax credit has been instrumental in helping the real estate market recover. The credit has brought new families into the housing market, and they in turn helped reduce the inventory of unsold homes.

The expanded credit is expected to encourage more investment in residential housing. Here are the details*:

• The $8,000 first-time homebuyer credit is extended through April 30, 2010, giving buyers who have signed a purchase contract by that date until June 30 to close on their home. The actual credit is equal to 10% of a home's purchase price, up to a maximum of $8,000.
• A new credit of up to $6,500 is available for repeat homebuyers who purchase a principal residence if they have been living in their current home for five consecutive years out of the past eight years preceding the purchase.
• Income limits have been increased. Now, single buyers with incomes up to $125,000 or married couples earning up to $225,000 may be eligible. Partial credits may be available to homebuyers who earn more.
• The credit is extended until April 30, 2011 for certain qualified military buyers.
• The credit applies only to homes priced at $800,000 or less.
• If you're planning to buy, act quickly. Experts say there will be no further extensions of the tax credit, so this is a once-in-a-lifetime opportunity to save money while buying a new home.
• For more information about the tax credits, or to learn about available properties in your area, call our CENTURY 21 Office today.

*This is not meant to be tax or legal advice. Consult a tax professional for details.

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