Tax Credit Closing Deadline Extended Through 9-30

Home Buyer Tax Credit

On June 30 both houses of Congress approved legislation that extends the closing deadline for

qualified first-time and repeat home buyer tax credit purchases from June 30, 2010, to September 30, 2010. President Obama is expected to sign The Homebuyer Assistance and Improvement Act of 2010 into law in the next few days.  The extension only applies, however, to those home buyers who had a binding sales contract in place prior to May 1, 2010. 

 For home builders and lenders, this legislation provides an additional three months to complete construction and backlogged paperwork in order for home buyers to close on the home and still receive the tax credit. 

 In past weeks, Senators Reid and Isakson offered amendments to the tax extenders legislation (H.R. 4213) to move the deadline to the end of September.  However, after three failed attempts to muster 60 votes to end debate on the bill, it appeared that the deadline extension effort would not succeed.  On June 29, the House approved fully paid-for, stand-alone legislation (H.R. 5623) introduced by Representative Dahlkemper of Pennsylvania by a vote of 409-5. The Senate unanimously approved the legislation on June 30. 

The $140 million cost of the extension is completely paid for by several small revenue raisers, including a provision that increases the penalties associated with bad electronic payments of tax liability.

 As of May 22, the Department of the Treasury indicates that for the tax credit program as a whole, more than 3 million home buyers have claimed the credit for a total tax savings of more than $21 billion.  The extension will help thousands of otherwise qualified home buyers claim the credit for sales that weren’t able to close in time due to conditions beyond the buyer’s control.

 The news on the extension will be updated on NAHB’s consumer website www.federalhousingtaxcredit.com and posted on NAHB’s tax credit Facebook page and Twitter feed.