While certainly not yet a “done deal”, the much discussed possiblity of legislation that would extend/expand the current first time homebuyer $8,000 tax credit moved closer to becoming a reality yesterday (Wednesday, October 28, 2009). Below is an Wall Street Journal that gives a good overview of what this reality may look like, if the legislation is passed. (We will, of course, update you as to the final disposition of this possibility, both in this space, and on The Money Show”).
“HOME BUYER CREDIT GETS NEW LIFE”The Wall Street Journal OCTOBER 29, 2009 By
COREY BOLES and JOHN D. MCKINNON
WASHINGTON -- Senate negotiators reached a tentative deal to extend a tax credit for first-time home buyers, but its passage remains uncertain. The agreement would extend the existing credit for first-time home buyers, worth up to $8,000, while offering a new credit of up to $6,500 for some existing homeowners, Senate aides said. The reduced credit would be available to all home buyers who have been in their current residence for a consecutive five-year period in the past eight years. The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real-estate market a bigger boost while preventing real-estate investors from benefiting.Many property experts have cited the credit as a reason for signs of recovery in the housing market in recent months. But that recovery was somewhat undercut by the September drop in new-home sales reported Wednesday. The credit would be extended from its current expiration date of Dec. 1 to all contracts entered into by April 30, and closed before July 1. It is expected that income limits on people claiming the credit would be increased to $125,000 for singles and $250,000 for couples, from the current $75,000 and $150,000, aides said. The credit phases out for people making more than those amounts.While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. Senate Majority Leader Harry Reid (D., Nev.) hopes to add it to a bill currently on the Senate floor to extend federal unemployment insurance benefits. But agreement on that hasn't been finalized. While Senate Republicans are likely to support the measure, House Democrats have raised concerns that it carries a high cost to the government. The Internal Revenue Service is examining the program for alleged abuse. Write to Corey Boles at corey.boles@dowjones.com
and John D. McKinnon at john.mckinnon@wsj.com
Printed in The Wall Street Journal, page A4, [October 29, 2009]
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