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Now that the extended and expanded tax credit bill for homebuyers has been passed by Congress and signed by President Obama, more people are seriously considering buying a home or selling their residence.

A quick review of the new tax credit law:

Instead of terminating on Nov. 30, the $8,000 credit for first-time homebuyers was extended to April 30, 2010. It is effective for home sale contracts entered by April 30 and closed by June 30.

Also, the new law expands the tax credit incentive to include a credit of up to $6,500 for owners of existing homes who are purchasing another principal residence. To qualify, they must have lived in their previous home for five consecutive years out of the last eight years.

The annual income eligibility limits to claim the full credit amount for both groups of homebuyers has been raised to $125,000 for individuals and $225,000 for married couples.

“The tax credit has proven to be a powerful economic incentive,” said Joe Robson, chairman of the National Association of Home Builders. “The action by Congress to extend and expand the credit will further stabilize housing and the economy by creating new jobs, stimulating home sales, reducing foreclosures, cutting excess inventories and stabilizing home prices.”

NAHB estimates that the extended and expanded tax credit will create 211,000 jobs and generate 180,000 additional home sales in the coming year. It is also expected to generate
$9.6 billion in wage income and $6.9 billion in federal, state and local taxes.

Carolyn Warren, author of the new book, “Homebuyers Beware” (published by FT Press), also takes a very positive view of the new tax credit law.

“I believe giving the housing industry this shot in the arm will help counteract the economic damage from new foreclosures that are on the horizon for 2010. When more people buy homes, it’s not just the banks and Realtors who benefit, but also home appraisers, home inspectors, decorators, painters, landscapers, furniture and appliance stores, even down to the pizza delivery guys — all benefit. And when all these folks have money to spend, that helps the economy as a whole,” she said.

To find out more about national real estate columnist Jim Woodard, visit the Creators Syndicate Web site at www.creators.com