Will the First-Time Home Buyer Credit be extended?

Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but the Senate lawmakers are not certain how it should be brought to the Senate floor, and its passage remains uncertain. The agreement would extend the existing credit for first-time home buyers (up to $8,000) while offering a new credit of up to $6,500 for some existing homeowners, being made available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years.

The provisions would extend the credit from its current expiration date of Dec. 1 to all contracts entered into by April 30, and closed before July 1. It is anticipated that income limits to claim the credit would be increased to $125,000 for singles and $250,000 for couples. The credit phases out for people making more than those amounts.

The new provisions are aimed at giving the real estate market a greater boost by expanding the availability of the credit beyond first-time buyers and extending the time period in which the credit can be claimed.