Real Estate News: Homebuyer Credit Extended & Expanded

Real estate agents and potential homebuyers around the world have reason to rejoice! After being passed by the House with an overwhelming 403-12 vote and then by the Senate with an even more impressive vote of 98-0, the President signed a new homebuyer’s tax credit bill into action this past Friday.

In addition to extending the deadline for the $8,000 tax credit until the end of June, the new bill also includes an exciting addition: current homeowners can also receive a $6,500 tax credit if they choose to purchase a new home. In order to qualify for the tax credit, current homeowners must have lived in their home for 5 consecutive years within the past 8 years. Therefore, even those homeowners who have been renting their homes out for the past 3 years can still enjoy the credit if they lived in their homes for the five years before that. Similarly, those who sold their homes less than 3 years ago are still eligible for the credit if they lived in the home for the 5 consecutive years beforehand.

Supporters of the new tax credit bill are hopeful that providing current owners with a tax credit will help with getting more expensive properties moving. With the previous bill, most areas around the country have only seen movement within the less expensive properties. This is because most homebuyers who took advantage of the credit were also mostly interested in purchasing homes that were in foreclosure or that were otherwise low in cost. Since the previous owners of these properties were often in financial trouble, they weren’t looking to purchase a more expensive home. By providing a tax credit to current homeowners, industry experts are hopeful that many will choose to buy up, thereby getting sales moving in mid to higher-end properties as well.

This is not to say, however, that current homeowners must purchase a more expensive home in order to qualify for the credit. In fact, current homeowners will qualify for the credit regardless of the cost of the new home. Even those current homeowners who have already signed a contract to purchase a new home will still qualify for the credit so long as they didn’t actually finalize the purchase until after the bill was signed.

With so many different options available for qualifying the tax credit, it is easy to see why so many people are feeling excited about the new bill!

Eric Bramlett

Eric Bramlett is the broker & co-owner of One Source Realty, a boutique firm specializing in Lake Austin real estate. Eric manages a number of local Austin websites, including his Steiner Ranch real estate site, and his central Austin real estate site. Eric actively blogs on his own sites, and guest blogs on a number of real estate related blogs.