Home Buyer Tax Credit Extended

The House of Representatives voted last Thursday to extend the first time homebuyer tax credit.  The bill was approved with an overwhelming 403-12 margin in Congress.  On Friday it was passed to the White House and enacted as law by president Obama.

Jim Gillespie, CEO of Coldwell Banker LLC, played a key role in the extension of this bill.  Gillespie and many other leaders in the real estate industry have been activists for this cause.  They have fought for almost a year now to have the bill extended, and in a email he sent out to Coldwell Banker associates he states,

“This is an historic moment for our industry as well as the culmination of more than a year’s worth of hard work and meetings with elected officials and policy makers. I want to personally thank all of you who participated in Coldwell Banker’s Legislative Week, which was the springboard for my meetings on Capitol Hill, as well as the numerous other legislative calls for action — I am both proud and appreciative of how so many of you made office visits, phone calls and e-mailed your elected officials. Combined with Realogy’s instrumental efforts on Capitol Hill, I know that our grass roots outreach to Congress and the Administration truly helped make a difference on this issue.”

The Senate was also commended by the National Association of Realtors for the extension.  NAR estimates that the current tax credit aided about $22 billion in home sales.

Bill Details:

·         Extends the present $8,000 tax credit for first-time home buyers through April 30, 2010.  

·         Current homeowners are eligible for a $6,500 tax credit through April 30, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years.

·         If potential home buyers have a binding contract on or before that date, they will have until July 1 to close the transaction.  

·         Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples.

·         The purchase price of the home cannot exceed $800,000. 

·         To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.