While the passing of this credit is still to come,according to the Wall Street Journal, the Senate reached a compromise on extending and expanding the $8,000 tax credit for first-time home buyers. The terms of the new agreement are as follows:
- Extend the first time buyer credit worth up to $8k (read about the current program)
- Offer a new credit of up to $6,500 for existing homeowners given the home buyer has lived in their current residence for 5 out of the last 8 years (consecutively)
- Raise the qualifying income limits to $125k for single taxpayers and $250k for joint taxpayers (Current is $75k and $150k)
- Have sales agreements April 30,2010 and close by June 30, 2010
This isn’t a done deal, this agreement still faces votes in the Senate and the House. Increasing the duration of this program will certainly continue to help sales of homes under $400k. Adding the credit to existing homeowners should help stimulate the “trade up” market.