Last week I wrote about how congress was attempting once again to pass an extension of the $8000 first time homebuyer tax credit. There had been several false starts to get an extension passed as the senate and congress weren't able to agree on amounts of credits, whether to extend the credits at all, and whether it should be expanded to include current homeowners.
Earlier this week congress was finally able to come to an agreement on an extension of the $8000 first time homebuyer tax credit, and in addition, they added on a new $6500 tax credit for people who already own a home. This morning President Obama is expected to sign into law the Worker, Homeownership, and Business Assistance Act of 2009 that expands the popular homebuyers tax credit and extends unemployment benefits.
$6500 Homebuyer Tax Credit For Move-Up Buyers Added
For many people the most exciting news is that there will now be a tax credit for current homeowners. The tax credit for move-up buyers will take effect after the date of enactment
(when the bill is signed). Unfortunately for those who have already bought a house it doesn't seem to be retroactive.
- The credit is available for homes that go under contract by April 30, 2010 and close by June 30th, 2010.
- Current homeowners can claim a $6,500 credit as long as the property they are vacating has been their primary residence for at least five consecutive years out of the last eight years.
- Income limits: $125,000 a year for individuals, $225,000 a year for married couples. (these are higher limits than before)
- Homes that cost more than $800,000 aren’t eligible for the credit.
- $6500 tax credit is not retroactive. (from the language of the bill: “shall apply to residences purchased after the date of the enactment of this Act.”)
So to all those people who have been sitting on the sidelines hoping for a tax credit for current homeowners , some of you are in luck. Because of the language of the bill a lot of people are still excluded (myself included), but there are still a lot of folks who will now be jumping into the home shopping game.
Will the new $6500 tax credit push you to start looking for a new home? Would you consider moving if there wasn't a tax credit? Do you think it will have an appreciable effect on the economy and the real estate market?