Homebuyer tax credit program gets extension

The extension and expansion of the existing homebuyer tax credit programs are positive steps for the nation’s residential real estate market, said Ron Peltier, Chairman and CEO of HomeServices of America Inc., the nation’s second-largest independent residential real estate brokerage.

The existing homebuyer tax credit program, which has been in effect since January 2009, provides up to $8,000 in tax credits for individuals purchasing their first home, as well as for those who have not owned a home for three years. It has been extended into 2010.

Under the new extended legislation, the current Nov. 30, 2009, deadline to close on a home has been expanded to June 30, 2010.

The newly-enacted tax credit provides eligible home buyers who have lived in their current home consecutively for five of the previous eight years with up to $6,500 in tax credits.

Qualified, prospective homebuyers looking to capitalize on either tax incentive will need to have a signed purchase agreement by April 30, 2010, and will need to close on their home by June 30, 2010.

“We view this as an extremely positive step for our industry,” Peltier said.

“The extension of the homebuyer tax credit and, in particular, expanding the tax credit to include current homeowners, creates motivation for those buyers that have been contemplating a home purchase,” he added.

The tax credit is available for the purchase of principal residences only, and the home must cost no more than $800,000. Vacation and second homes are not eligible.

Individual buyers must have an annual income of no more than $125,000, or $225,000 for those who file jointly.

Buyers who have served in the military outside of the U.S. for at least 90 days will receive a 12-month extension on the tax credit.

“Our industry is one of the nation’s key economic drivers,” Peltier said.

“We are confident in its long-term viability and in its chief mission of helping facilitate the American dream of owning a home.”

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