Home Purchase Tax Credit Extended: Is This Wise?
November 8, 2009 by admin
John Lounsbury submits:
President Obama signed into law today an extension until April 30, 2010 of the home buyers’ tax credit. Contracts signed by April 30 must close by June 30 to qualify. The new law has several provisions not in the existing law:
- Income limits have been increased to $125,000 for individuals and $225,000 for couples. These were formerly $75,000 and $150,000, respectively.
- Current home owners who have lived in their home for five of the past eight years are eligible for a tax credit of $6,250.
- Qualifying home prices must not exceed $800,000.
- First time home buyers continue to be eligible for an $8,000 tax credit.
Realtor ® Magazine, at Realtor.org (here), stated that the new law is expected to contribute approximately $22 billion to the economy. This source also stated that the expiring tax credit law was taken advantage of by approximately 2 million people. Since this year is on track to see less that 5.6 million home sales, this means the tax credit will be involved in approximately 36% of all home sales for 2009.
Other information from Realtor.org indicates that the industry had extensive lobbying activities on behalf of this legislation:
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