It’s official. As of Friday, November 6 the $8,000 Tax Credit has been extended with some additional benefits.

It seems the experts thought the original bill would cause a ripple of move up buyers starting with the First Time Buyer. That didn’t happen. It turned out most of the first-timers cashed in on the abundance of foreclosure and distressed properties. Very few of those were buying another home. The new bill hopes to stimulate the move-up chain by including previous home owners.

Here’s a summary:
• Homebuyers must sign a contract by April 30 and close by June 30, 2010.
• Income limits are raised 
    o Single buyers may earn up to $125,000 and still get the full credit 
    o Married couples may earn up to $225,000
• Eligible Buyers: 
    o First Time Homebuyers – Have not owned a home in the last three years; $8,000. 
    o Trade Up Buyers – Have owned and occupied a residence for at least five of the last eight years; $6,500.

This should help fuel the current demand at least until the second half of 2010. What happens after that we’ll have to wait and see. Those of us in the Real Estate and Mortgage business will have to “make hay while the sun shines”.

I am recommending that my clients check with a tax expert to make sure they touch all the right bases. I don’t want to mislead anyone, and I’m not a qualified tax advisor.