In an effort to spur home buying, the Senate unanimously agreed Wednesday to extend and expand the termination of home buyer tax credit into spring. President Barack Obama is expected to sign the bill today.
In the first phase of the government’s homebuyer tax-credit program, only first-time purchasers were eligible for up to $8,000 in tax credits. But the new bill gives an opportunity of up to $6,500 tax credit for homebuyers who have lived in their current homes for at least five years.
Eligibility for the incentives
Both the first time home buyers and those currently residing in their own houses have to sign purchase agreements by April 30, 2010 and sales must close on their new property by June 30.
The credit facility would be extended for another year, until June 30, 2011, for members of the military serving outside the United States for at least 90 days.
Rep. Ron Kind, D-La Crosse stated, "The bill gives more Americans the opportunity to become homeowners.
"Through legislation I authored, I am proud to support our troops and veterans through this bill. Service members should have every opportunity to succeed and enhance their life when they return home, and this bill will help them do just that."
Those who qualify for the incentive are individuals with an annual income of up to $125,000 or couples earning $250,000 which is an increase from $75,000 and $150,000, respectively, from the current tax credit.
However, the credit is legible for the purchase of homes that cost $800,000 or less and not applicable to vacation or second homes.
Johnny Isakson, a Republican Senator from Georgia, states that the consumers need to take advantage of the credit while it lasts.
"Tax credits like this only work by creating the sense of urgency to take advantage of them," Isakson said.
"This is the last extension of the home buyer tax credit, and I urge all Americans whether they're first-time buyers who've always dreamed of having a home of their own or someone who's been gridlocked in the failure of our move-up market to take advantage of this opportunity," he added.
Tax credit a boost to the economy
The home buying tax credit has given a boost to the real estate that has had a positive impact on the economy. The extension of the deadline will also stabilize housing sales during the slow winter months.
Rep. Paul Kanjorski, D-Nanticoke declared, “The homebuyer tax credit has first and foremost provided a valuable resource for many individuals and families to help them to buy a home for the first time, as long as they have the financial means to afford it.
“It has also helped stimulate our economy by encouraging responsible investments in a part of the market that was deeply affected by our country’s financial problems.”
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