The popular U.S. first time home buyer tax credit has been expanded and extended, with its signing into law by President Barack Obama. While the initial round gave home buyers $8000 or up to 10 percent of purchase price if they closed by November 30, 2009 and had not bought a primary residence in the last three years, the new bill allows repeat buyers a tax credit as well. The new rules require a contract by May 1, 2010 with a closing by June 30.

Income maximums are now less restrictive as well. The first tax credit version eliminated single filers whose gross income exceeded $75,000, and married filers whose joint incomes were over $125,000. Now the limits are $125,000 for singles, $225,000 for those who file jointly.  For all the details on the new legislation, see WebCPA.

Not everyone is sure that this extension is going to be beneficial for the struggling U.S. economy or the real estate industry. The Baltimore Sun’s Real Estate Wonk blog published the recent results of a Wonk poll that asked how the tax credit affected those participating.  Of those responding, 26 percent planned to sell their current home and buy a new one; 20 percent were dismayed by this use of their tax dollars; 16 percent wouldn’t qualify for either version; 10 percent already took advantage of the tax credit as a first-time home buyer; 7 percent would now buy their first time home thanks to the extension; and 5 percent were repeat buyers who would use the credit to make an additional home purchase.

Here’s the Wonk blog story. The question now is what become of the U.S. real estate market July 1, when all this goes away.

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