Tax Credit Extended

President Obama on November 6th signed legislation extending the $8000 tax credit for first-time home buyers and at the same time approved a new tax credit of as much as $6500 for current homeowners interested in buying a new home.
According to the website at www.federalhousingtaxcredit.com the Homeowner Affordability and Stability Plan extends the existing tax credit of as much as $8000 for first time home buyers to the middle of next year and establishes a new credit of as much as $6500 for current homeowners who plan to buy. It requires that a contract be signed by the end of April. Buyers also need to have lived in their current home for five of the past eight years. Homeowners may retain their existing home and rent it, or use it as vacation home.
Other provisions include the $6500 credit is available for home buyers who sign a contract on an existing home by April 30,2010, and close by July 1, 2010. The cost of the new home may be as much as $800,000. Buyers will not have to repay the $6500 as long as they occupy the new home for at least three years. The credits do not apply to previous sales-the purchase must have happened after November 6th. The home purchased must be the primary residence of the buyers. It is allowable to trade down to a less expensive home. Income limits for existing homeowners are $125,000 for a single person and $225,000 for a married couple.