Senate passes home buyer credits
With a 98 to 0 vote Wednesday, the Senate passed legislation to extend the credit for first-time buyers and add a credit for certain repeat buyers. It's expected to move to the House floor today.
It seems to be the same proposal we've been talking about for the last few days. Highlights:
--$8,000 for first-timers signing contracts through April 30 and closing by June 30. That credit was due to expire at the end of the month.
--$6,500 for repeat buyers who have "lived in their current residence for five consecutive years out of the last eight," the Los Angeles Times reports. But Sen. Harry Reid's press release phrases it as "those who have owned a home for five consecutive years within the previous eight years." More on this in a moment.
--Individual tax filers making no more than $125,000 and joint filers making no more than $225,000 could take the full credit, a significant increase of the income cap. The credit would decrease in value for people making more than those amounts, phasing out completely after $145,000 for singles and $245,000 for couples, the Times says.
--If the home you're buying is priced over $800,000, you can't partake.
You might be wondering what this "five consecutive years out of the last eight" really means for potential repeat buyers. I did, because it makes a difference whether it's "lived in their current residence for five consecutive years out of the last eight," as the Times writes, or "those who have owned a home for five consecutive years within the previous eight years," as Reid puts it -- or something else entirely.
For instance, could the credit go to homeowners-turned-landlords who are renting out their properties after living there five years and who now want to sell? Or what if you bought your home in, say, January 2003 and sold it last December? That would be five consecutive years out of the last eight, after all.
I went on an hour-and-a-half-long search last night for the actual text of the legislation. (Can I get an "ARRGGH"?) I finally did find it, or what appears to be it. Here's what it says about repeat buyers:
In the case of an individual (and, if married, such individual's spouse) who has owned and used the same residence as such individual's principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be [eligible for the credit] with respect to the purchase of such subsequent residence.
So ... er ... clear?
Fortunately, the text notes later that the repeat-buyer credit "shall apply to residences purchased after the date of the enactment of this Act." So that clears it up a bit.
If you're a first-timer hoping to take advantage of the higher income limits, keep in mind that the same timeline applies.
Not that this is a done deal quite yet, of course.