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8000 Tax Credit Extended and Expanded

Posted on November 16 By Justin McHood

Recently, the $8000 tax credit was extended and expanded to also include a $6,500 tax credit for move up buyers. The tax credit has been popular with people who are first time home buyers and there was quite a bit of discussion as to whether or not Congress would/should extend the deadline beyond the original November 30, 2009 deadline.

But with the tax credit extension now official, here are a few of the highlights courtesy of CNN:

The legislation also will extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30.

The bill also creates a $6,500 credit for those who buy a home after living in their current house at least five years. That measure will apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years.

The credit will be available only for the purchase of principal residences priced at $800,000 or less.

The bill will raise the adjusted gross income cap to $125,000 for single filers and $225,000 for joint filers. The amount of the credit currently begins to phase out for taxpayers whose adjusted gross income is more than $75,000, or $150,000 for joint filers.

How much will this 8000 tax credit extension cost the taxpayers?

According to the article:

The extension will cost $10.8 billion over 10 years, according to the Joint Committee on Taxation.
Whether it is worth it or not remains to be seen. I suspect that in about 30 years from now, when our children and grandchildren are worried about paying the debt we have left them - that will probably be the time to make the best judgment as to whether or not it was worth it.

Don't ask anyone in 2010, it is too early to tell!

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