South Carolina Business News: Congress Expands The Tax Credit
By Molly Parker
CHARLESTON -- Charleston-area real estate agents say Congress’s decision to extend and expand the first time home buyer tax credit could help prop up the housing market through the typically slower winter months.
The $8,000 tax credit for first time home buyers was set to expire Nov. 30. President Barack Obama signed the new measure into law Friday.
Click here for details on the newly expanded tax credit.
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This most-recent tax credit legislation represents a substantial expansion of the original measure. It increases the income threshold for a first time home buyer to qualify for the $8,000 tax credit. For a single person, that limit was increased from $75,000 to $125,000. For married couples, the income threshold increased from $150,000 to $225,000.
In step with the previous measure, the $8,000 tax credit will apply to individuals who have not owned a primary residence in at least three years. A significant eligibility provided by the new bill extends a $6,500 tax credit to individuals who have lived in their primary residence for five out of eight consecutive years.
Real estate agents said the original tax credit helped spur home sales in the $300,000 and under price range. The CMPS Institute, an organization that certifies mortgage bankers and brokers, said in a release that the extended pool of qualified home buyers could spike home sales in areas where the cost of living is higher.
The tax credit applies to homes purchased for less than $800,000 before May 1, 2010.
“The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said CMPS Institute Chairman Gibran Nicholas.