Homebuyer Tax Credit Extension Until June 2010

Homebuyers' $8000 Incentive Eligibility Expanded, Deadline Extended

Nov 6, 2009

The deadline for the homebuyer tax credit was extended to June 2010 and eligibility requirements for the tax credit have been loosened, expanded to include more buyers.

People in the market for a new home can breathe a little easier knowing that the deadline for the homebuyer tax credit has been extended from the end of November 2009 until the end of June 2010. The stress of needing to find a suitable home quickly and get the purchase closed before the looming deadline has been eased.

The homebuyer tax credit pot has also been sweetened to make more buyers eligible. As before, first-time homebuyers and buyers who have not owned a home during the previous three years are eligible for an up to $8,000 tax credit on a new home purchase. And now people who have owned a home for five of the last eight years are also eligible for up to $6,500 tax credit on a new home.

The income limit for qualifying buyers has also been raised. Previously, single taxpayers could not earn more than $75,000 to receive the full credit, and married taxpayers filing jointly could not earn more than $125,000 to receive the full credit. Now these limits have been raised to $125,000 and $225,000 respectively.

To qualify for the homebuyer tax credit, buyers must sign a contract to purchase a home before April 30, 2010. They must close on the purchase of their home by June 30, 2010.

Homebuyer Tax Credit Offers Boost for Sluggish Real Estate Market

The real estate market is very important to the overall stability, as well as a good indicator of the strength, of the U.S. economy. President Obama and other politicians hope that the homebuyer tax credit will stimulate the real estate market through the traditionally lethargic winter season.

Critics of the homebuyer tax credit argue that it puts money in the hands of buyers who would have purchased a home anyway, without the tax incentive. Critics also point out that by helping to shore up the real estate market, the tax credit helps drive housing prices up, which splits the incentive between buyers and sellers.

Bubble of Homebuyer Tax Credit Enlarged

The bubble of eligibility for the homebuyer tax credit has been enlarged. More homebuyers can now qualify for the credit if they purchase their home by June 2010. First-time buyers, buyers who have not owned a home in the previous three years, and buyers who have owned a home during the last five of eight years meet the eligibility requirements for the tax credit. The income limits for eligibility have also been raised.

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