Thursday, November 5th both the House and the Senate passed an extension to the First Time Home Buyers Tax Credit. It is now headed to the Presidents desk to be signed into law.

“New” Details in the Home Buyer Extension

• The Existing $8,000 tax credit is extended until May 1st, 2010.
• Binding contract must be entered before May 1, 2010, and must be closed before July 1, 2010.
• A NEW tax credit has been created for “long-time residents of same principal residence”

” In the case of an individual (and, if married, such individual’s spouse) who has owned and used the same residence as   such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.”

• The tax credit for “long time residents” purchasing a new home is 10% of the purchase price up to $6,500.
• Income Restrictions for the $8k credit has been increase from $75,000 to $125,000 for singles and from $150,000 to $225,000 for married couples filing jointly.
• Credit does not apply for homes purchased over $800,000.
• Primary Residences only.

Some economic advisors are claiming that around 70% of all current homeowners would be eligible for the expanded tax credit. The projected cost of the First Time Home Buyers Tax Extension is $11 billion.

UPDATE: Friday, November 6th

Disclaimer: We are not lawyers or tax professionals, please seek proper counsel before claiming any tax credits.

For more information federalhousingtaxcredit.com