8000-tax-creditThe first-time home buyer tax credit has been extended and broadened by Congress to include more than first-time home buyers. The legislation, which was officially extended November 6, stretches the deadline to contracts entered into by April 30, 2010 and closed by June 30, 2010. In addition, the legislation now includes a new $6,500 credit for owners of existing homes who are purchasing a new principal residence. Homeowners can take advantage of this credit if they have been residing at their principal residence for no more than five consecutive years out of the previous eight.

The income eligibility limits have also been increased to $125,000 for individuals and $225,000 for married couples, allowing those that may not have qualified under the old legislation to claim the full credit amount.

“We commend lawmakers for acting in a bipartisan manner to extend the first-time home buyer tax credit beyond its Nov. 30 deadline and expand it to a wider group of buyers,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “The tax credit has proven to be a powerful economic incentive. Today’s action by Congress will further stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices.”

The National Association of Home Builders estimates that the extended tax credit will create roughly 211,000 jobs and generate 180,000 additional home sales in the next year. This is in addition to the $9.6 billion in wage income and $6.9 billion in federal, state and local taxes it is forecasted to generate.

In what other ways will this extension impact the housing industry and the economy overall? Does this provide adequate support to home buyers or should more benefits have been added to the legislation?

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