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In what has been urged as a must-have by real estate professionals and builders, the $8000 tax credit for first-time home buyers (previously due to expire Nov. 30), has been extended through April 30, 2010, according to the Associated Press. Not only has it been extended, but it has also been expanded to include more buyers.

Details on Tax Credit Extension:

  • $8000 tax credit for first-time homebuyers extended for buyers who sign a contract by April 30, 2010 (and who close by the end of June).
  • $6500 tax credit offered to homebuyers who have lived in their current residence at least five years and who want to “trade up” (buy a new primary residence).
  • Couples earning as much as $225,000 a year and individuals earning up to $125,000 would qualify (up from $75,000 for individuals and $150,000 for couples).
  • Tax credit not applicable for those buying homes worth more than $800,000.
  • Those who sell their new home or stop using it as their main residence within three years would have to repay the credit.

Will the Tax Credit Extension Help?

According to a recent survey Zillow conducted through Harris Interactive, nearly one in five (18%) prospective first-time home buyers said extending the $8,000 tax credit would be the primary influence on their decision to buy a home before the end of 2010, potentially stimulating an additional 334,000 home sales. The caveat here is the survey asked first-time homebuyers if they would purchase a home prior to the end of 2010; this bill will only go through April 2010, not the end of 2010 and it involves a different type of buyer, as well.

The cost for the tax credit extension is estimated to be $10 billion and opinions vary on whether it will actually help the economy or not. One writer provides 5 reasons the U.S. should stop homebuyer perks.

What do you think of the tax credit extension? Good or bad?  Jump into Zillow Advice and take part in discussions on the tax credit extension.

  • P Larison

    The goverment should be giving a tax break and not to the rich and the investors we compete against to buy a home!!! Want the government to save money. It is simple….solar cars is number one…we would not be dependent on oil and making arabs rich, not to mention save the ozone layer!!!! Next, stop NASA…this is stupid to spent millions on space shuttles, wait for the economy to turn around and lastly….tax more for products being made in other countries. Then products will be made in america and there will be jobs for everyone who lives here. Wake up America!!!! Cut the pay they are giving all the politicans and we will get more people running for office that really want to help America and not just want a BIG paycheck and lets start with the president..Keep this tax break and help the blue collar worker stop renting.

  • http://www.newhomesteps.com rodney@new home building

    It’s time to bring it back and try to spark the economy and housing market during the cold winter. This is a time where we need to be very aggressive in the United States.

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