Home buyer tax credit likely to be extended and expanded

The US Senate approved a bill today that will extend and expand the first-time home buyer tax credit that is set to expire on November 30, 2009. Contrary to what some real estate agents are reporting, the extension has not been approved yet. It still needs approval from the House of Representatives and President Obama. Whether or not you agree with the credit, it does have strong bi-partisan support in Congress and is likely to be passed by the House as well. President Obama has also voiced support, so the passage of the new tax credit, while not a done deal, is extremely likely at this point.

The details of the tax credit, as passed by the Senate, include extending the credit for first-time home buyers until April 30, 2010. It also expands the credit by offering a $6,500 tax credit to existing home owners to purchase a new home, provided that they have lived in their home for 5 consecutive years in the previous 8 years. It also raises the income limits of the program to $125,000 for individuals and $225,000 for couples.

For home buyers worried about hitting the November 30 deadline, it looks like you will get a reprieve. For home buyers looking to purchase in the next few months, it appears that you may get an added benefit from Uncle Same. Stay tuned and I will post again when the law has been approved and the final details are available.

UPDATE (11/5/09, 11:00AM): The House of Representatives just passed the tax credit extension, so its approval is now simply waiting signature by President Obama.

UPDATE (11/7/09): President Obama signed this bill into law extending and expanding the home buyer tax credit. See this post for complete details.