Home Buyer Tax Credit to be Extended and Eligibility Expanded

I was told this is a done deal, but I haven't seen an announcement yet - so it might still change. The tax credit was expanded to move-up and higher income buyers. The amount of the credit was reduced to a maximum of $7,290.

Senate Close to Deal Replacing Homebuyer Tax Credit

The details:

• Income eligibility for first-time home buyers stays at $75,000 for individuals and $150,000 for couples.
• For move-up buyers, income eligibility is $125,000 for individuals and $250,000 for couples.
• There is a minimum 5 year residency requirement in their current home for move-up home buyers.
• The tax credit is the lesser of $7,290 or 10% of the purchase price.
• The credit runs from Dec. 1, 2009 to April 30, 2010, with an additional 60 day period to close escrow. (So end of April to sign contract, end of June to close escrow)
• Expect bill to be signed by Friday.

This is obviously bad economics, but it must be good politics. The first-time home buyer impact will fade (and will probably cost over $100,000 per additional home sold). The move-up portion will probably be even less effective.

Apparently this tax credit will be combined with the extension of the unemployment benefits to avoid a veto (the real reason the extension was being held up).