There’s been a lot of talk about extending the First Time Home Buyers Tax Credit lately.

Senate leaders released more details about their compromise on the home buyer tax credit today. Among other things, the deal would give the IRS more authority to spot cheaters in advance and set an $800,000 price limit on all homes eligible for the credit.

The existing $8,000 tax credit for first-time home buyers (meaning those who have not owned a home in the previous three years) expires after Nov. 30.

The compromise would extend the existing credit and create a new $6,500 credit for move-up buyers. Both types of buyers must sign a binding contract to purchase a new or existing primary residence between December 1, 2009 and April 30, 2010. Buyers would have until June 30 to close the deal.

Move-up buyers will be eligible if the home they are leaving has been their principal residence for five years or more.

The cost of the newly purchased home may not exceed $800,000 for new or move-up buyers. There is no partial credit for homes over $800,000, said Sen. Johnny Isakson, R-Ga.

The income limits for all buyers would rise to $125,000 for single returns and $225,000 for joint returns, up from $75,000 and $150,000 respectively, under the current program.

Isakson, one of the sponsors of the credit extension, whether $6,500 will motivate existing homeowners to go to the time and expense of buying a new home or Read the rest of this entry »