Support for expansion and extension of the tax credit is growing in Congress. Here is a preliminary look at what might be coming down, extended out to people who are IN a Purchase Contract by the end of April, but closing before June, 2010.
Dodd-Lieberman-Isakson Amendment
$8,000 Homebuyer Tax Credit
The Issue:
• Ask your Senator to support the DoddLiebermanIsakson amendment by extending the
$8,000 firsttime homebuyer tax credit.
The DoddLiebermanIsakson amendment would:
• Extend the tax credit to June 30, 2010.
• Expand the credit by removing the firsttime homebuyer requirement.
• Raise the income limits to $150,000 ($300,000 for joint returns).
• For purchases made in 2010, taxpayers are able to claim the credit on their 2009 income tax return.
• Maintains that homebuyers do not have to repay the credit, provided the home remains their main residence for 36 months after the purchase date.
• The 36 month recapture provision is waived for a member of the Armed Forces on active duty who has to move because of a military order.
Why it is needed:
• The housing market remains fragile.
o The market has improved and prices have stabilized in many areas, but the market has not fully corrected. Retaining the credit sustains that recovery.
• The tax credit has been effective.
o NAR research suggests that as many as 355,000 sales this year can be directly attributed to the availability of the credit.
o One prominent economist attributes 400,000 sales to the availability of the credit.
• The tax credit stimulated market activity.
o The volume of housing sales has improved steadily every month since the credit was
enacted.
o The credit pulled people from the sidelines and created some momentum that had been
absent.
• Home sales continue to stimulate economic activity.
o The economy will never fully recover until housing markets fully recover. Thus, the
stimulus the credit provides is still needed. NAR estimates that every sale generates
approximately $60,000 of additional economic activity.
