U.S. President Barack Obama has signed into law, HR 3548, the Worker, Homeownership and Business Assistance Act of 2009. The bill extends the present $8,000 tax credit for first-time homebuyers through April 30, 2010. Current homeowners are eligible for a $6,500 tax credit through April 30, provided they have lived in the home they are selling, or have sold, as principal residence for five consecutive years in the past eight years. If potential homebuyers have a binding contract on or before that date, they will have until July 1 to close the transaction.
Income limits for eligible home buyers are expanded to $125,000 for single buyers and $225,000 for couples. The purchase price of the home cannot exceed $800,000. To help guard against fraud, buyers are required to attach documentation of purchase to their tax return.
The U.S. House of Representatives approved the legislation by vote of 403 to 12. Earlier this week, the United States Senate approved HR 3548 by a unanimous 98-0 margin. Passage of the bill is seen as an important step in ensuring a national real estate and economic recovery. The bill is sponsored by Rep. James McDermott (D-WA).
“Realtors appreciate the swift action by Congress to extend the home buyer tax credit and expand it to some current homeowners,” said National Association of Realtors (NAR) President Charles McMillan, a broker with Coldwell Banker Residential Real Estate in Dallas-Fort Worth. McMillan praised the efforts of several senators to put the recovery above politics. They are Sen. Johnny Isakson, (R-GA.); Senate Majority Leader Harry Reid (D-V); Finance Committee Chairman Max Baucus (D-T); Sen. Chris Dodd (D-CT.), chairman of the Banking, Housing and Urban Affairs Committee; and Sen. Joe Lieberman (I-T), chairman of the Homeland Security and Governmental Affairs Committee. NAR economists estimate that the current tax credit has contributed approximately $22 billion to the general economy, and approximately two million people will take advantage of the tax credit this year.
“The substantial rise in home sales we’ve seen over the past few months proves that the tax credit is working and is being used by buyers who were waiting for the right opportunity to get into the market,” McMillan said. “This important incentive is helping to stabilize the housing market, stimulate the economy and create new jobs in communities all across our great nation. Extending and expanding the home buyer tax credit will enable even more families to take advantage of current low interest rates and affordable prices to invest in their future through homeownership.”
“I have been a strong advocate of the first-time homebuyer tax credit, which has boosted home sales during a difficult economic period,” said Rep. Bill Foster (IL). “By temporarily extending and expanding this tax credit, we allow additional families to take advantage of this opportunity, and the resulting increase in home sales will continue to spur the housing market until normal demand takes over.”
To view a copy of HR 3548, the Worker, Homeownership and Business Assistance Act of 2009, click here.