Both the Senate and House have now passed the homebuyer tax credit bill and the White House said President Barack Obama would sign it Friday (tomorrow).
The bill not only continues the first-time homebuyer tax credit, but expands the credit to any homebuyer who purchases a primary residence.
To be clear, here is what the bill allows:
- First-time homebuyes get a tax credit for 10% of their purchase price, capped at a maximum of $8000.
- Repeat homebuyers get a tax credit for 10% of their purchase price, capped at a maximum of $6500.
In both cases, the credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.
"This is probably the last extension," said Senator Johnny Isakson, R-Ga., a former real estate executive who championed the credits.
To qualify for the new tax credits, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30, 2010. Military personnel get the same benefits extended for an additional year.
The stimulus aims to keep the housing market headed in the right direction. Not only are homes priced extremely aggressively, the tax credits can often offset all closing costs and put money back in your pocket.
I applaud the government program and look forward to assisting you in taking advantage...