$8,000 Home Buyer Tax Credit Extended to June 2010

The $8,000 home buyer tax credit, part of the economic stimulus package, has been extended into Summer 2010 and has been expanded -- the tax credit will now also be available to higher income buyers and those who are not first-time home buyers, but want to "trade up" or "move up" to a new home. Analysts believe that including these two groups will help to further stimulate the ailing housing market.

In order to take advantage of the renewed $8,000 tax credit, home buyers must sign a contract by April 30, 2010 and close on the house by June 30. Eligible home buyers now include single persons who earn up to $125,000 and married couples who jointly earn up to $225,000.

$6500 Tax Credit for "Move Up" Buyers

The new home buyer tax credit bill allows even more homeowners to claim the credit on their tax return. In addition to first-time home buyers, The bill also makes more homeowners eligible to claim the credit on their taxes. People who have lived in their homes for at least five years can claim a $6,500 tax credit, though first-time buyers -- people who haven't owned a home in three years or more -- can still claim the full $8,000 rebate.

Experts predict that the addition of the $6,500 tax credit for move-up buyers will help to further improve home prices and continue the housing market turnaround. Move-up buyers may be considering buying a newer home than the one they own, but the $6,500 credit will persuade many to move their plans forward and "buy now."

Will the Home Buyer Tax Credit Work Long-Term?

The first phase of the $8,000 home buyer tax credit -- like the "Cash for Clunkers" automotive stimulus program -- seems to have helped home prices to stabilize and even move up slightly in recent months, according to major home price indexes... But have we become dependent on the tax credit?

What will happen when the tax credit program ends after June 2010? Some believe that the housing market will continue to decline after the short lift it is now receiving from the home buyer tax credit. Maybe the program's effect on the overall economy due to increased consumer spending -- home buyers spending their tax rebate on consumer goods -- will help to drive the economy upward and the housing market will follow suit. We will have to wait and see.

What do you think?

Please comment below and share your thoughts on the $8000/$6500 home buyer tax credit program.

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$8000 First Time Home Buyer Tax Credit Extended to 2010?

$8000 Tax Credit Extended for First Time Home Buyers?

The $8,000 Tax Credit Available Now

Under the Obama Administration's housing plan -- part of the huge government stimulus package -- first-time home buyers can claim an $8,000 tax credit (or 10% of the home's value if the home is under $80,000) on their 2008 or 2009 income taxes.

The tax credit is refundable -- taxpayers who receive the credit will get a refund check or deposit for the full $8,000 even if their total taxes for the year totaled less than that.  $8,000 in the bank can be a massive help for someone just getting started with a new home.

For a home buyer to qualify for the credit, the purchase must be made between Jan. 1, 2009 and Nov. 30, 2009. Buyers must not have owned a home for the past three years to qualify as "first time" buyer. They must also live in the house for at least three years, or they will be obligated to pay back the credit.

Home buyers must also earn less than $75,000 (individually) or $150,000 (as a couple) to qualify for the existing $8,000 first-time home buyer tax credit.

Will the First-Time Home Buyer Tax Credit Be Extended?

Many people have taken advantage of the tax credit, but time is now running out as December approaches and the deadline nears -- unless Congress votes to extend the $8,000 tax credit program well into 2010.  The real estate industry is lobbying for an extended and expanded home buyer tax credit that would help to keep home sales going.

The U.S. real estate industry wants the home buyer tax credit to be extended at least halfway into 2010, and expanded from $8,000 to a lofty $15,000.  The industry also wants the credit to be offered to all buyers -- not just first-time home buyers (or those who haven't owned a home in 3 years or more).

The Senator who originally backed the bill which provided the first-time buyer tax credit, Johnny Isakson (R) of Georgia, now says that the housing market may see another downturn if the current tax credit plan ends this year.  Isakson is sponsoring a new bill that would continue to provide an $8,000 tax credit to first-time home buyers and up to $6,500 to those who have lived in the same home for at least 5 years.  For a home purchase to qualify under the extended plan, it would have to close by June 30th, 2010.

The bill moved to a final vote, with 85 Senators voting in favor and only 2 against.  Members of Congress expect the bill to pass this week.

Check back on The Mortgage Loan Zone for updates on this and other issues.