By Dina ElBoghdady
Washington Post Staff Writer
Thursday, October 29, 2009
The Senate has reached a broad bipartisan consensus on extending a lucrative tax credit for first-time home buyers beyond the Nov. 30 deadline and expanding it to include some current homeowners, according to the Senate's Democratic leader.
Under the plan, people buying their first home would receive an $8,000 tax credit if they sign a contract by April 30 and close on it by June 30, according to people familiar with the proposal who spoke on the condition of anonymity because the timing had not been finalized. Homeowners shopping for a new primary residence would be eligible for a $6,500 tax credit if they owned their home for five consecutive years in the previous eight.
In both cases, individuals who earn more than $125,000 annually and couples who earn more than $250,000 would not be eligible, the office of Senate Majority Leader Harry M. Reid (D-Nev.) said on Wednesday.
Reid and other supporters of the tax credit hope to attach their proposal to an unemployment benefits bill that may reach the Senate floor this week if lingering issues are resolved about whether to also include two unrelated Republican amendments. "We do expect this tax credit plan to be considered as a part of the unemployment bill at some point," said Regan Lachapelle, a spokeswoman for Reid.
The proposal is the latest of several regarding the tax credit that have been floated in recent days. Reid and others have been trying to cobble together a plan that would appeal to fiscal conservatives who have balked at the cost of the tax refund program and want it to lapse by the end of next month, as scheduled.
On Wednesday, Senate Minority Leader Mitch McConnell (R-Ky.) said there is wide backing for the latest plan among Republicans, saying that "most members" support it and the underlying unemployment measure. But Don Stewart, his spokesman, warned that nothing is a done deal. "Everything is fluid" until there is unanimous agreement on what will reach the Senate floor, Stewart said.
The tax credit was enacted early last year to help jump-start the housing market. Real estate industry officials say it has helped boost sales and clear out a glut of lower-priced homes, including foreclosures, which have helped drag down home prices.
But the program's staunchest critics, including some economists, argue that most of the people who received the tax credit would have bought homes anyway.