A deal struck among key senators last night to extend the homebuyer tax credit will broaden the benefit to include existing homeowners who are buying a new home as well as first-time homebuyers.
Tax credit for move-up buyers will be less than for first-time buyers, but still significant. They will qualify for a credit of up to $6,500 and must have owned their current homes at least five years. Under the current program and the new one for 2010, first-time buyers qualify for up to $8,000 and cannot have owned a home for the past three years.
Income limits would rise under the new proposal. Individuals would have to make less than $125,000 a year and couples $225,000 per year to qualify. Under the current program, limits are $75,000 for individuals and $150,000 for couples. Move-up buyers will be subject to the same income limits as first-time buyers.
Under the compromise worked out last night, the homebuyer tax credit would be extended seven months. Homebuyers will have to sign contracts by the end of April in order to qualify and they would have until the end of June to close. The current credit expires December 1. Cost is estimated at roughly $10 billion.
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