Home-Buying Tax Credit May Be Extended

   

Posted: Nov 3, 2009

Members of the U.S. Senate have come to a tentative agreement to extend and expand the tax credit program for first-time home buyers.

The original tax credit, which has been linked to an increase in home buying in recent months, was originally set to expire on November 30. Under the new program, the tax credit of up to $8,000 would be extended to home purchases that are under contract by April 30, 2010. The purchase would have to close by the end of June.

Additionally, Senator Chris Dodd (D-CT) has called for the credit to be expanded to include people who are already homeowners. The Senate deal under consideration would extend a $6,500 credit to people who have lived in their current homes for at least five years.

"The compromise we have now would expand the credit beyond first-time home buyers," Regan Lachapelle, an aide to Senate Majority Leader Harry Reid (D-NV), told Bloomberg News in late October.

In order to qualify for the first-time home-buying credit, prospective homeowners cannot earn more than $125,000 if they are single, which is considerably higher than the original limit of $75,000. For couples, the income limitation is $225,000, up from $150,000.