As you may have heard, the tax credit for First-time homebuyers was set to expire at the end of this month. This deadline has caused a lot of prospective homebuyers to rush to find a new home in the past few weeks and many will not make it. Also, there has been a lot of concern that the expiration of the First-time Homebuyer credit might put a halt to the recovery currently going on in the new residential construction market.
The Senate, in their benevolent wisdom, has passed a bill that will extend and expand the tax credit. In its current form, the bill will extend the $8000 tax credit through April 30th of next year. Also, it will increase the qualifying income levels for couples up to $225,000/year, an almost $55,000 increase. Furthermore, the credit will be expanded to include existing homeowners that have owned their current primary residence for 5 of the previous 8 years. These individuals will be eligible for a tax credit up to $6,500. The bill still needs to work its way through the House of Representatives, and some of the details might change. However, this action is a good step in the right direction for prospective homebuyers. For more information about the Senate Bill, go here.