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Tax Credit Got Extended!

first_time_home_buyer_tax_creditCongress has sent President Obama a plan to give homebuyers an additional three months to finish qualifying for federal tax incentives that boosted home sales this spring.

The legislation would give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000.

Under the current terms, buyers had until April 30 to get a signed sales contract and until June 30 to complete the sale.

The bill allows only people who already have signed contracts to finish at the later date.

The National Association of Realtors had estimated this week that about 180,000 home buyers who already signed purchase agreements were likely to miss the Wednesday deadline.

The House approved the measure Tuesday.

Legislation in the Senate, sponsored by Majority Leader Harry Reid (D-Nev.), was approved Wednesday night by unanimous consent.

The popular tax credit has helped to stabilize the nation’s slumping housing market. Nearly three million taxpayers claimed the tax credit through May 22 – claiming more than $21 billion – according to the Treasury Department.

The Realtors group said the tax credit generated 1 million home sales that would not have happened otherwise.

The bill would also make it easier for the Internal Revenue Service and state prison officials to share information about inmates in order to fight fraud.

The Treasury Department’s inspector general for tax administration reported last week that nearly 1,300 prison inmates had improperly received more than $9 million in tax credits for home buyers while they were locked up.

The report said the IRS did not have up-to-date information on inmates.

The tax credit for first-time home buyers was part of Obama’s economic-recovery package enacted last year. In November, Congress extended the credit and expanded it to longtime owners who bought new homes. First-time buyers were eligible for a tax credit of up to $8,000. Current owners who bought and moved into another home could qualify for a credit of up to $6,500.

The Realtors group had been pushing hard in Congress for the extension. Mortgage lenders, the trade group said, have been swamped with borrowers trying to get approved by the end of the month.

Delays with mortgage lending and appraisal companies have meant that home sales are taking far longer to complete this year.

There have been particularly long delays for buyers of so-called short sales, in which banks agree to accept less than the total mortgage amount. In Las Vegas, for example, short sales made up nearly a third of all sales last month.

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