Congress Passes the Tax Credit Extension

Atlanta Real Estate Forum

Friday November 06, 2009 12:59 PM

Big things were happening on Capitol Hill yesterday as the tax credit extension legislation was sent to the Senate and then to the House. The Senate passed the credit with a vote of 98 to 0 and then sent the bill to the House, who passed it by a vote of 403 to 12. Clearly, there were very few Congressmen opposed to the legislation, which is called the Unemployment Insurance Bill. By the end of day yesterday, the legislation had been sent to the President for his signature.

The Unemployment Insurance Bill includes quite a few new parameters for the home buyer tax credit:

  • $8,000 first time home buyer tax credit has been extended to April 30, 2010
  • A $6,500 tax credit for “move-up” buyers has been established, and it will also expire on April 30, 2010
  • Individuals who have contracts as of April 30, 2010 will still qualify for the credit as long as they close within 60 days
  • Income limits for the $8,000 credit have been increased to $125,000 for an individual or $225,000 for a couple

The National Association of Home Builders is incredibly excited about the expansion of the tax credit, and they predict that it will create 211,000 jobs and generate 180,000 addition home sales in the coming year. As real estate professionals, we hope these predictions are accurate and are excited to see what changes the new tax credit will have on the housing market. With the inclusion of the move-up buyer tax credit, there will no doubt be more movement in the market. The National Association of Realtors has released a brief that breaks down the new provisions, if you want more detailed information about it.

Titled the Unemployment Insurance Bill, the legislation also extends unemployment insurance benefits and offers relief to cash-strapped firms by providing broader tax benefits for businesses with net operating losses. President Obama should sign the bill into a law in the very near future, of course we will let you know once he does.

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