The first-time homebuyer credit is
supposed to expire tomorrow, June 30. That's the date by which buyers
who had a contract in place by April 30 are to close on the residence in
order to claim the $8,000 tax break.
But late this afternoon, the House approved a
bill that would extend the closing date another three months, until
Sept. 30.
The measure, passed 409 to 5, now goes to the
Senate.
Just last week, that legislative body tried to
get the longer closing time added to the tax extenders measure that kept failing. So it's
likely that the Senate will sign off, too, on this separate bill.
The final Senate vote could come tomorrow. But
even if it doesn't, odds are good that it will happen soon.
UPDATE: Senate Majority Leader Harry Reid (D-Nev.) and Senate Finance Committee Chairman Max Baucus (D-Mont.) late Wednesday announced legislation to push the closing date for the homebuyer credit back to Sept. 30.
And don't worry if the credit extension
becomes official after the June 30 deadline passes.
Just go ahead with your closing as soon as you
can. If the credit extension passes, which I believe it will, the tax
break will be available to those who tried but failed to get the
paperwork finished tomorrow.
Making making tax law
changes retroactive is just the
sloppy way Congress operates nowadays.
Tougher
still: In addition to extending the closing date, this
latest bill seeks to reduce fraud associated with the credit.
Thanks to a recent report by the Treasury Inspector General for
Tax Administration that around 1,300 prison inmates claimed and received more than $9
million from the tax break, the bill would allow the IRS
to disclose tax return information to prison administrators.
Who's worth more? This latest
iteration of the often-tweaked housing tax break would save around
180,000 homebuyers from losing out on the credit.
The cost to the U.S. Treasury for three extra
months? Around $9 million over the next decade.
I'm happy for the homebuyers who'll save some tax dollars, but
really, this seems like a lot of money for a very small group of people.
Of course, the real dollars involved are the contributions that
the Realtors will make to members of Congress this election year.
Without the three extra months, who knows what kind of campaign funds
would be lost.
Don't believe this tax law change is driven
more by politics than policy?
Also this afternoon the
House was unable to muster enough votes to keep unemployment
benefits going out to folks who've been out of jobs for months.
Of course the cost is substantially more,
around $33 billion. But so are the number of affected individuals, 1.7
million people trying to pay rent, buy groceries and keep the
electricity on.
The sad fact is that the jobless just don't
have as good of lobbyists as do folks in the real estate industry.
Related posts:
- First-time homebuyer tax credit extension is no sure
thing - Senate tax extender changes: homebuyer credit
extension,
easing S
Corp taxes? - Tax extenders moving (maybe) in the Senate
- Tax policy and the American homeownership dream
- Putting the homebuyer credit to rest
- 'Successful, costly' first-time-plus homebuyer credit
ending - The federal homebuyer credit's 'exit strategy problem'
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