Congress Likely to Extend & Expand Homebuyer Credit

Since January, first-time homebuyers have been getting tax credits of up to $8,000 as part of an economic stimulus package put into place earlier this year. That program, which left those who are not first-time home buyers out in the cold, was set to expire at the end of November 2009. On Wednesday, the Senate voted to extend and expand the tax credit to include many buyers who already own homes. Now it just needs to get through Congress, where a vote will take place Thursday.

Buyers owning their current homes at least five years will be eligible for tax credits up to $6,500. First-time homebuyers or those who haven't owned a home in the last three years would get up to $8,000. Both groups would have to sign a purchase agreement by April 30, 2010 and close by June 30, 2010 in order to be eligible.

Sen. Johnny Isakson (R-Georgia), said, "This is probably the last extension."

Also included in the bill passed in the Senate is a plan to extend unemployment benefits for those without a job for more than a year, and a clause that would allow companies now losing money to recoup taxes paid on profits earned in the previous five years.

Sen. Max Baucus (D-Montana), chairman of the Senate Finance Committee, said:

"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively. With the right mix of tax breaks and investments we will get through this recession and get folks working again."

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.