Home Buyer Tax Credit -- New and Improved

The much anticipated home buyer tax credit extension has finally been approved by a vote of 98-0 in the Senate. It has also passed in the House and now waits for the President's signature.

First time home buyers have been eligible for tax credits up to $8000 since January 2008 as part of the year's economic stimulus package. The newly proposed program will expand the credit to include existing home owners along with first time home buyers.

Under the revised program, those who have owned a home for at least five years will be able to apply for tax credits of up to $6500 when they purchase their next home. To qualify, buyers will have to sign a purchase agreement by April 30, 2010 and close by June 30th, 2010.

The maximum purchase price on a home will be $800,000 for a primary residence only. Income limitations are $125,000 for single tax payers and $225,000 for joint filers.

Both The National Association of Home Builders and The National Association of Realtors have been lobbying hard for this extension and expansion of the tax credit. NAR claims that of the 104 million who have taken advantage of the tax credit so far, that 350,000 of these first time home buyers made the move specifically to earn this credit and otherwise, would not have made the purchase. Bringing more buyers into the market will reduce a still heavy inventory and hopefully stabilize home values.

The tax credit is also set to be extended for another year for military personnel serving outside the United States until June 30th, 2011.

The recovery of the housing market is and should be a top priority in bringing our economy back around to positive growth. Let's hope with this newly revised tax credit, that more
Memphis home buyers will see their way to a closing table before the deadline of June 2010.