Senate Extends and Expands Homebuyer Tax Credit

$8 thousand credit to first-time buyers is extended till April 30, 2010. Bill adds move-up buyer credit of $6.5 thousand.

Palm Coast, FL – November 5, 2009 – In a 98-0 vote, the U. S. Senate approved a bill to extend and expand the homebuyer tax credit. The $8,000 first-time homebuyer credit, which was set to expire on November 30th, was extended. The bill also gives a tax break of up to $6,500 to move-up buyers; those who’ve lived in their present home a consecutive 5 year period within the last 8 years. Buyers in either category must have a signed purchase contract by April 30, 2010 and close by June 30, 2010. Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.

Only principal homes costing $800,000 or less are eligible. Vacation homes are excluded. The credit is phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

The measure also includes help for money losing businesses, allowing them to recoup taxes paid in previously profitable years going back 5 years to offset current losses. The current law allows businesses with gross annual receipts of more than $15 million to claim losses back only two years. Homebuilders and develpers will be obvious beneficiaries.

The bill could face a House vote as early as next Tuesday. If passed by the House, the bill will still require the President’s signature.

What d o you think? Reader comments are welcome.

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6 replies
  1. Memory Hopkins
    Memory Hopkins says:

    extended tax credit for 1st time home buyers

    Your article makes it sound like this is a done deal. Isn’t it true that this Bill has to pass in the House as well?

  2. Nancy
    Nancy says:

    Qualifying criteria

    Is this available only to U S Citizens? If a person owns a home in Canada and purchases a home in the U S for the first time do they qualify as a first time buyer?

  3. JOHN
    JOHN says:

    What are they thinking?

    Just how important is the real estate market to our economy? Try asking the unemployed and naming an industry that is not effected by the housing market. Here is an opportunity to turn the housing market around by offering real tax incentives. What does the senate do, extend the $8000 first time homebuyer tax credit and add a ridiculous $6500 tax credit for move up buyers. I can’t think of a better place to put tax payer dollars than into housing. Is this the best we can do congress?

  4. Toby
    Toby says:

    Reply to Memory

    I did say that a house vote would be held as early as next Tuesday, but to clarify, I’ve highlighted that text and added that the President must also sign the bill.

    With a 98-0 vote in the Senate, I don’t expect any problems with passage.

  5. Toby
    Toby says:

    Reply to Nancy

    It will be available only to those paying U.S. taxes. The final bill has not been passed. I do not know how it will deal with citizenship, or location of previous home.

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