Senate Extends the First Time Homebuyer Tax Credit Closing Date

Just a week ago, the Senate made a big decision, voting to extend the homebuyer tax credit closing date to September 30. What this means is that all those homebuyers who purchased a home under the program for the $8,000 homebuyer tax credit will have a better chance to meet the qualifications within the closing date, gaining the tax credit as promised.

Under the original regulations, homebuyers were required to complete the purchase of their new home with a closing date of June 30. Obviously, with June 30 just a few days off, thousands of homeowners would have not met the tax credit deadline. Closing on a property can be frustratingly long, due to the complexity of the process and the many people involved. Applying for the tax credit added some complication to an already-long process. Some realtors estimated that one third of all the applicants for the tax credit—around 180,000 homebuyers—would have failed to close on their home by June 30, and thus would not gain the homebuyer tax credit.

The decision to extend the tax credit was an obvious one. Why should government go to all the trouble of providing a tax credit only to have thousands of applicants fall through because of a tight closing date? The havoc it would have dealt to potential homebuyers, realtors, and other segments of the market would have been severe. Now, with the tax credit extended, homebuyers can rest assured.

In order to successfully complete the tax credit process with the extended closing date, the homebuyer needs to have signed the purchase agreement on or before April 30.  This is not an extension of the credit itself but an extension of the deadline.  The tax credit extension was just what the homebuyer tax credit program needed to guarantee its success and finish well.