There are dozens of articles on this site about the Home Buyer Tax Credit. You can see them all here.
For the most recent news about the Home Buyer Tax credit, please see this article (July 2, 2010).
Maybe”¦ Or maybe not. It’s politics after all.
Currently there are FIVE bills flitting about Washington, D.C. that would, assuming they are signed into law, either extend or expand the currently existing $8,000 homebuyer tax credit due to end on December 1, 2009.
Senator Johnny Isakson (R-GA) introduced Senate Bill S1230 ”“ the Home Buyer Tax Credit Act of 2009 ”“ on June 10. Senator Isakson created the original $15,000 homebuyer tax credit that morphed into the current $8,000 first-time homebuyer tax credit that became law when the Stimulus Bill was passed. This bill proposes a non-refundable tax credit up to $15,000, that can be split equally over two years, for all primary residence purchases ”“ not just purchases by first time home buyers. The bill has been referred to the Senate Finance Committee for further debate. It has 12 cosponsors, notably including Senator Chris Dodd (D-CT), the Senate Banking Committee Chairman. It would expire one year after enactment.
Representative Kenny Marchant (R-TX) introduced House Bill HR 2619 on May 21. This proposes to extend the existing $8,000 tax credit to July 1, 2010 and adds provisions for a tax credit of up to $3,000 for homeowners who refinance. This bill has been referred to the House Ways & Means Committee for further debate. There are currently no cosponsors.
Representative Eddie Bernice Johnson (D-TX) introduced HR 2606 ”“ the Home Buying Credit Expansion Act ”“ on May 21. This bill proposes to remove the first-time homebuyer requirement (allowing all principle residence purchases to qualify for a tax credit) as well as extends the bill through Jan 1, 2010. It has one cosponsor (Rep Timothy Bishop D-NY) and has been referred to the House Ways & means Committee.
Representative Howard Coble (R-NC) introduced HR 2801 ”“ the Home Ownership Move the Economy (HOME) Act ”“ on June 10. From the Department of Redundancy Department, this bill appears virtually identical to Rep Johnson’s in that it opens the tax credit up to all primary residence purchases and extends the credit to Jan 1, 2011. It has no cosponsors yet and has also been referred to the House Ways & Means Committee.
Representative Dan Burton (R-IN) introduced HR 2655 on June 2. It has picked up six cosponsors, four Republicans and two Democrats. It joins its cousins in the House Ways & Means Committee and also eliminates the first time home buyer requirement while extending the credit to Jan 1, 2011.
What does all this mean?
I am clearly not a political analyst. It is apparent however, there is interest in extending the existing home buyer tax credit. Why there are three virtually identical bills proposed escapes me. Perhaps it’s a power play where Congressmen want their name attached to the bill. Power plays in D.C. ”“ hard to imagine isn’t it?
Isakson’s Senate Bill proposes the most sweeping changes. Given that it is virtually identical to the original tax credit provisions in the Stimulus Bill, I think this one is going to have a rough road to passage. It was previously passed in the Senate, but the House squelched it. Seems they could just as easily do that again given the current makeup of the House.
The four bills in the House are all quite similar. None propose increasing the credit from the existing $8,000 limit. It will be interesting to see if Marchant’s proposed $3,000 credit for refinances gains any traction. All of the proposals eliminate the first-time buyer provision, which seems to me to be a good thing to do. The NAR recently reported that 40% of current home sales were made by first time buyers. Of course that means 60% were not (not factoring in investors and second home buyers, which are not an insignificant source of home purchases).
Expanding the availability of the tax credit to non-first time buyers seems prudent. There are no current bills that propose extending the tax credit to investors or second home owners ”“ all require the purchase to be a primary residence.
Will the existing $8,000 tax credit be extended or increased?
While it is purely speculation on my part, I think we’re likely to see the existing tax credit extended beyond its current end date of December 1, 2009 (to qualify currently, your home purchase must close on or before November 30, 2009). And we may just see the requirement that you be a first-time home buyer lifted. I’d be surprised if the $15K credit gets past the House, though it may clear the Senate ”“ Dodd’s co-sponsorship will help in that regard.
Of course we’re talking about politicians in Washington, D.C. so who the heck really knows what (if anything) will happen. Do not, I repeat do not plan on the tax credit being extended/expanded based solely on my speculation!
We’ll be watching these bills closely and will report when, or if, they make it out of Committee. Remember your High School civics class ”“ the vast majority of bills die in committee”¦
UPDATE Aug 11, 2009: All of the bills referenced above are still in committee….
UPDATE Aug 28, 2009: Yep, all of the bills referenced above are still in committee….
UPDATE Sept 21, 2009: Please see this post for the latest update on these bills, and a new one!