Homebuyer Tax Credits Deadline Extended

By:: Kirk Haverkamp | July 01, 2010

The U.S. Senate has voted to extend the deadline for the homebuyer tax credits another three months, giving buyers until Sept. 30 to close home sales qualifying for the credit.

The measure, previously passed by the House, is expected to be signed by President Obama today.

The Senate passed the measure with little time to spare, voting Wednesday night to approve the bill by unanimous consent. Known as the Homebuyer and Assistance Act of 2010 (H.R. 5623) it was passed the House the day before on a vote of 409-5.

The National Association of Realtors (NAR) has previously said that without the extension, as many as 180,000 homebuyers would lose out on the credits for failing to close by the previous deadline of June 30. Under the rules for the tax credits, homebuyers had to have sales agreements completed by April 30, but the NAR says that many sales have been unable to close due to delays in securing financing or problems with obtaining approvals for short sales.

With the bill’s last-minute passage though, it’s not clear what the impact will be on homebuyers who completed sales agreements by April 30 but have been unable to close the sale. Many of these sales agreements likely contained provisions cancelling them if the sale was not finalized by June 30. Since President Obama is not signing the bill into law until today at the earliest, it’s not clear if those cancelled sales can be revived.

The tax credits provide up to an $8,000 credit for first-time homebuyers and a $6,500 credit for repeat buyers. The credits are seen as having boosting home sales through much of last year and into the spring, but there are numerous indications that new sales have fallen off significantly since the April 30 deadline.

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