Tuesday, October 27, 2009

Will The $8,000 Homebuyer Tax Credit Be Expanded To Include All Buyers?

The Associated Press reports that top Democrats in the Senate are pressing a plan that would extend a popular tax credit for first-time home buyers but gradually phase it out over the course of next year.

The proposal, by Majority Leader Harry Reid of Nevada and Senate Finance Committee chairman Max Baucus of Montana, would extend the $8,000 tax credit - which expires Nov. 30 - through March 31. Its value would drop by $2,000 for each of the subsequent three quarters of 2010.

The plan, which could face a vote in the Senate this week, appears aimed at countering a far more generous $17 billion bipartisan plan that would extend the $8,000 credit through June 30, 2010, boost the income cap for eligibility, and open the credit to all buyers, not just first-timers.

Senators are maneuvering to add the home buyer tax credit extension to legislation to extend unemployment benefits by up to 20 weeks. That bill faces a key test vote today.

Supporters say the tax credit has helped revive the housing market and say that if it is cut off as scheduled at the end of next month, home sales could drop off.

Reid sought to schedule a vote on the competing measures yesterday but was blocked by top Senate Republican Mitch McConnell of Kentucky, who is demanding votes on unrelated GOP proposals.

One such proposal would require people receiving unemployment insurance to be processed through the E-Verify program to prove legal immigration status and would require all federal contractors to use E-Verify. E-Verify is an Internet-based system that employers use to check on the immigration status of new hires.

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