There is great news for people considering purchasing a home! Congress has recently voted for new legislation, as a part of the plan for stimulating the U.S. housing market, that makes the Federal tax credit of up to $8,000 now available to even more first-time buyers. Also, certain people who currently own a home and want to buy a new one may also be eligible for a Federal tax credit totaling up to $6,500.

The Extended Home Buyer Tax Credit extends and enhances the current legislation which runs out on Nov. 30. Both first-time and move-up buyers may now get the advantages of the Federal tax credit. Needless to say, this is in addition to the current historically low home loan interest rates.

Outlining the new legislation’s particulars::

* The first-time buyers’ $8,000 has now been extended through the end of April, 2010. * Current homeowners are now eligible for a $6,500 tax credit, if they have lived in the residence they are selling as their primary residence for five straight years within the last eight years. * The income limits for qualifying home buyers were increased to a range of $75,000 to $125,000 (for single buyers) and a range of $150,000 to $225,000 for couples. * Time has been extended to allow for closing the home purchase. As long as they have a binding contract by the last day of April, they will then have until the 30th of June, 2010, to close the purchase. The qualifying purchase price of the new residence must be no more than $800,000.

Here’s how it works:

* Tax credits grant a dollar-for-dollar payment of taxes owed and are available as a refund. The amount of the credit will be first applied to any tax liability for the year of purchase. Then the remainder will be refunded to the buyer. (For example a first-time buyer who owes $2000 in taxes would receive a check for $6,000). * Any single-family home purchased to be used as a primary residence (including condos, co-ops) will qualify if it is purchased by April 30th, 2010 and closed by the end of June, 2010. * The full amount of the tax credit may be claimed by individuals who have an adjusted gross income of no more than $125,000 or $225,000 on a joint return. Above those incomes, the amount of the tax credit decreases until the upper limit is reached – $145,000 for individuals or $245,000 of joint income.

Jim Navary has been a freelance writer and researcher for over thirty years covering a wide range of subjects. He is also a licensed real estate agent in the Commonwealth of Virginia specializing in real estate in the Tri-Cities area of Virginia and, in particular, Fort Lee, Virginia, area homes for sale.

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