According to an article in the Star-Telegram, the Senate reached a compromise on extending the $8,000 tax credit for first-time home buyers which was devised to combat the effects of the foreclosure crisis.
The article said:
“Under the Senate compromise, buyers must have sales agreements in hand by April 30, but they will have until June 30 to go to settlement, the sources said. The measure still faces votes in the full Senate and the House.”
Legislators also added a $6,500 tax credit for home buyers who are not first-time buyers and raised the income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers. The Senate version of the bill will also exclude homes that cost more than $800,000. If the tax credit extension is passed, supporters of the bill are hoping that it will help relieve the housing pressure created by the foreclosure crisis.
What You Need To Know
- The tax credit cannot be used by anyone under the age of 18 years old.
- The bill has not been passed yet; but once it is passed, homebuyers must complete their transactions within 60 days of the new deadline.
- The tax credit is not an immunizer against future foreclosure. First-time home buyers need to make sure that they are financially prepared for homeownership before they sign a mortgage. Even with the tax credit, if you are not financially stable, foreclosure can become inevitable.