First Time Home Buyers Tax Credit Likely to be Extended and Expanded

Tax credit to be expanded to include all buyers, with close dates as late as June 30, 2010.

Senate leaders have apparently reached a tentative agreement to both extend and expand the federal first time homebuyers tax credit, which as written will extend the credit to include current homeowners as well.

The Senate agreement provides for an extension of the credit to home purchase contracts signed by April 30, 2010 and closed by June 30, 2010. The credit amount would be a maximum of $8,000 for first time homebuyers (as it is currently) and up to $6,500 for current homeowners who trade up to a larger primary residence. It would be phased out for home purchases over $800,000 and for single buyers who earn over $125,00o per year or marrieds earning over $225,000 per year. For current homeowners, the credit would only be available to those who have owned their current homes for at least 5 years.

Santa Clarita homebuyers have been holding their breath hoping for this extension, since the likelihood that they could close on time for the current deadline is close to zero unless they’ve already found a home and are in escrow with regular sellers or with approved short sales. This new proposal isn’t finalized yet though, and chances for it getting rapid approval are increased if it is attached to another existing bill up for approval, such as the bill to extend unemployment benefits. So, if you haven’t contacted your Senator yet regarding this issue, be sure to call or email to express your viewpoint.

Santa Clarita Realtor Linda Slocum is a Certified Distressed Property Expert (CDPE) and Certified Residential Specialist (CRS) specializing in Santa Clarita residential real estate and short sales. You can reach her at 661.670.0349 or at Linda@SantaClaritaRealEstateBlog.com. To search for Santa Clarita homes, use our neighborhood search tools or visit HoneyStartPacking.com.