Chattanooga Real Estate Blog

The $8,000 tax credit for first-time home buyers would be extended and some people who already own residences could claim a benefit under a proposal by Senate Democrats.

An agreement reached and passed by the Senate would let homeowners who buy a new home qualify for a $6,500 credit if they have lived in their prior residence for five years.

A quick summary of some of the highlights include:

— The tax credit would be $8,000 for first-time home buyers and $6,500 for move-up buyers (from December 1, 2009 to April 30, 2010).

— Move-up buyers will be eligible, so long as the home they are leaving has been used as their principal residence for 5 years or more.

— The tax credit would sunset on April 30, 2010. However, there would a binding contract rule that will permit those with contracts as of April 30th to qualify for the credit as long as they complete the transaction within 60 days.

A House Democratic aide said House leaders would likely adopt whatever language the Senate approves.