The First-Time Homebuyer Tax Credit has itself been credited with helping spur many of the home sales in recent months, and thats prompting some lawmakers to call for extending and expanding it.
Passed as part of the stimulus package in February, the tax credit, which covers up to 10 percent of the cost of a first home, or up to $8,000, is due to expire in the coming months. People who meet the eligibility requirements must complete the purchase before December 1.
Thats the way it was supposed to be when the Recovery Act was signed into law. However, the National Association of Realtors wants to expand the tax credit to $15,000, and it wants to allow all buyers to be able to qualify, not just those who have been out of the market for three years, according to The New York Times. The $15,000 figure is actually the amount that the credits initial sponsor in Congress, Sen. Johnny Isakson, R-Ga., a former real estate agent, had wanted. Now Isakson is introducing a bill that would provide up to a $15,000 tax credit to any buyer who stays in their newly purchased home for a minimum of two years, according to the Times.
Given the downturn in the housing market over the past year, the tax credit has emerged as one of the few bright spots, but it is projected to cost the government $15 billion, more than double the amount originally budgeted. The NAR plan would cost the Treasury $50 billion to $100 billion.
Asked about whether the Obama administration would consider extending the credit, White House spokesman Robert Gibbs said the administrations economic team was evaluating the impact on new home sales and would make a recommendation to the president, according to the Associated Press.
The tax credit has been expensive, but it has arguably been successful in helping the ailing real estate and construction industries survive in recent months. However, like other supposedly temporary tax credits, the First-Time Homebuyer Tax Credit may end up being called the Perennial Homebuyer Tax Credit.