On November 5, 2009, Congress passed a bill extending and expanding the housing tax credit. The bill is awaiting the President’s signature. In order to help you better understand the new legislation, we are posting a comparison chart provided to us by the National Association of REALTORS.
The expiration date for the tax credit will move to April 30, 2010. First time buyers who have not had an interest in a principle residence for three of the past five years are still eligible for the credit, which is still a maximum of $8,000 for married couples and $4,000 for separate filers. A tax credit is now available for homeowners, who have consecutively resided in their primary residence for five of the last eight years. The maximum credit amount is $6,500 for married couples, and $3,200 for those filing separately.
The credit is available for home purchases up to $800,000. Income limits have been raised to $125,000 for single buyers and $225,000 for married couples.
Local market conditions are improving, as purchasers scramble to take advantage of the best buyers’ market in two decades. The expansion of the tax credit into the “move-up” market is expected to further fuel a housing recovery, as inventories continue to shrink and interest rates remain artificially low. The prevailing perception amongst buyers and the media is that the housing market has bottomed out and is on its way to stability and upward price movement.