The House yesterday unanimously approved extending the first-time home buyer tax credit for some members of the military.
H.R. 3590, or the Service Members Home Ownership Tax Act of 2009 (blogged about in Housing tax topics roundup) would extend the $8,000 tax break through Nov. 30, 2010, for service personnel stationed overseas during the 2009 tax year.
The credit's repayment provision —
The 416-0 House vote now puts pressure on the Senate to do the same. Word is that Senate Finance Committee leadership supports the House bill, but there's no indication as to just when H.R. 3590 might be considered on the other side of Capitol Hill.
Civilian extension? The House vote also gives us an idea of what might happen for civilian first-time home buyers.
Representatives and Senators would be hard-pressed to increase the credit amount – $15,000 is the limit that some folks are seeking — for you and me while leaving it at $8,000 for, as bill sponsor and House Ways and Means Chairman Charles Rangel (D-N.Y.) put it, making "sure that the brave men and women who put their lives on the line every day get to enjoy the same benefits as every other American who benefits from their service."
If I had to bet, I'd say this means the credit will be extended, probably for a year, but not increased and not expanded to all home purchasers.
Of course, we also have to remember that next year is midterm election time. Not to keep beating this horse, but some lawmakers who are in competitive re-election races might find adding to the deficit (if, on the House side, they can work around pay-go rules) is a small political price to pay when it is offset by tax benefits for potential voters.
About that deficit: The military home buyer bill passed the House because its $320 million price tag (which also includes some other tax incentives for military service homeowners) would be offset by higher failure-to-file penalties for businesses.
Coming up with more millions to cover another year of civilian home buyer tax breaks will be a challenge.
I suspect lawmakers would like to keep the amount of additional taxes they'll have to raise as low as possible, even when the taxes are for something as sacrosanct as homeownership.
Related posts:
Kay @ Don't Mess With Taxes
Frances,
This is from the Joint Tax Committee’s explanation of the recently enacted bill that extends the credit: In the case of a disposition of principal residence by an individual (or a cessation of use of the residence that otherwise would cause recapture) after December 31, 2008, in connection with Government orders received by the individual (or the individual’s spouse) for qualified official extended duty service, no recapture applies by reason of the disposition of the residence, and any 15-year recapture with respect to a home acquired before January 1, 2009, ceases to apply in the taxable year the disposition occurs.
In English, that says to me that you don’t have to repay the credit under this circumstance. Your base should have tax counselors who can confirm that, but you should be OK.
Frances
Do you know if you are in the military and have gotten the credit and then you get orders to move and want to rent your house out what do you do? Can the credit be waived? I have been looking for something on line on it and can’t find anything.
Heart
LOL, what a pathetic joke! Like anyone can afford to buy a house right now. The “Stimulus” package is a JOKE and only benefits the RICH. How about a REAL stimulus. Put that money into the hands of the SHEEPLE. Let them make their mortgage payments, car payments and credit card payments. The money will trickle right back into the economy.
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