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Possible Extension on Homebuyers’ Tax Credit

Congress has passed legislation to extend the deadline for homebuyers seeking an $8,000 tax credit. The House and the Senate both approved plans this week to extend the deadline for qualified buyers that signed a contract on a home purchase before April 30, 2010. The previous deadline to complete settlement on the contract by June 30th could be extended to Sept. 30th. The bill now needs to be approved by President Barack Obama before it can go into effect.

Due to the spike in residential real estate sales in April prompted by the tax subsidy, a backlog of paperwork was created. This backlog has prevented many buyers from completing their purchase by the end of June. As a result, those who signed their contracts by April 30th but have not yet closed will not receive the tax credit once the sale goes through. According to the National Association of Realtors, this extension could affect as many as 180,000 homebuyers nationwide.

The $8,000 tax incentive for first-time homebuyers was created last year as part of the federal government’s economic stimulus package.

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