Senate Compromises on the Housing Tax Credit

8,000 Tax Credit Extended to April 2010

The Senate has agreed on a compromise to extend and expand the home buyer's tax credit that is set to expire at the end of November. Terms of the deal have been explained by Senators Chris Dodd (D-Conn.), who chairs the Banking, Housing and Urban Affairs Committee, and Johnny Isakson (R. Ga.), a former real estate professional. The compromise expands the tax creidt to non first-time buyers and also adds an increase to the income limits. Additionally the deadline has been extended to April 30, 2010.

Under the new proposal, people who have lived in a primary residence for five consecutive years would be eligible for a $6,500 credit when purchasing a new property.

Incomes limits will be raised to $125,000 for individuals and $225,000 for couples, vs. $75,000 and $150,000 previously.

The maximum house value rises to $800,000.

The Senate has agreed to pass the extension, but Congress still has to vote on it and that could be as early as Tuesday night.