Last week, after the Senate gave its final and fully supportive approval on the homebuyer tax credit extension, the House of Representatives voted overwhelmingly to pass the legislation, sending the tax credit to President Obama who’s final sign-off on Friday made it official.

The $8,000 first-time homebuyer tax credit, which was slated to expire Nov. 30, 2009, will be extended for contracts signed before May 1, 2010 that close before July 1, 2010.  The new legislation also increases the income limit for couples with income up to $225,000, a nearly $55,000 increase above the current level.  This is particularly critical in the downtown Boston market where most buyers have income levels that exceeded the previous guidelines.

Buyers who already own a home are also now eligible for a tax credit and the purchase of a home. The $6,500 maximum credit will be available to existing homeowners who have lived in their current residence for five of the prior eight years. The legislation does set forth several provision including, limiting eligibility for existing homeowners to homes worth $800,000 or less, as well as making both credits available only for primary residences, not second homes or investment properties. The legislation will take effect November 7, 2009 and is not retroactive.

The original first-time homebuyer tax credit jump-started the housing market, driving home sales to the highest level in more than two yeas. The National Association REALTORS® reported sales jumped 9.4 percent to a seasonally adjusted annual rate of 5.57 million units in September and are 9.2 percent higher than the 5.10 million-unit pace in September 2008.

If you or someone you know is a first time buyer, now is the time to jump into the market and take advantage of the tax incentives and still low interest rates.  As someone who frequently works with first time buyers, I can demystify the process and make it as smooth and enjoyable as possible.  I’m here to help so call or email me today!