Mortgage – Homebuyer Tax Credit
United States Capitol
Question – Will the First Time Home Buyers Tax Credit be extended or will it expire?
Answer – Well Maybe… Or maybe not. Don’t you just love a definite answer.
For this tax credit to be extended or expanded, congress will have to pass a new bill to make it into a new law. Without this passage the current $8,000 home buyer tax credit will expire on December 1, 2009.
However, their are currently five different bills that have been introduced to the Senate.
S1230 – Home Buyer Tax Credit Act of 2009. Senator Johnny Isakson (R-GA) created the original $15,000 homebuyer tax credit that has now been expanded into the current $8,000 first-time homebuyer tax credit. S1230 includes a non-refundable tax credit up to $15,000, that can be divide equally over 24 months, for all primary residence purchases – not just purchases by first time home buyers. The bill has been sent to the Senate Finance Committee for 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 bill will extend the current $8,000 tax credit to expire on July 1, 2010 and also includes a tax credit of up to $3,000 for mortgage refinance. This bill has been sent to the House Ways & Means Committee for further debate.
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 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 this mean for you?
Senate Bill 1230 is the most radical of the bills. However, since it is almost identical to the one that failed to pass in the House, it will probably be killed in Committee.
The other four bills in the House are very close if not identical. Unfortunatly, neither of the four actually have any provisions to increase the $8,000 limit. One of the things that will be interesting is to see if their is any interest in adding the provision for the $3,000 credit for refinanced mortgages. All five of the bill eliminate the first time home buyer clause, which should help stimulate stagnant home sells.
We will be keeping a close eye on all of these bills and when we see action being taken we will try to keep you posted.
