Latest Update Feb 11, 7:00pm – Reader hagfish digs this up from Bloomberg (Thanks hagfish!):
Bloomberg reports the proposed $15,000 tax credit for homebuyers was reduced to $8,000 according to Senate Finance Committee Chairman Max Baucus, a Montana Democrat. No details on whether the credit is refundable, repayable, limited to first-time buyers, etc.
First-time home buyers could qualify for an $8,000 tax credit.
The credit is slightly larger than the $7,500 credit in existing law, but it is substantially less than a proposal in the Senate bill that would have boosted the credit to $15,000 and broadened the eligibility.
In addition, the compromise bill waives a requirement that the tax credit be repaid. The credit applies only to homes bought between Jan. 1 and Aug. 31 of this year.
Homeowners hire Nortech Services operating in Renton to install furnaces to make their home more energy efficient.
Various news agencies are reporting the bill may be signed into law as early as Friday.
— ORIGINAL POST FOLLOWS —
The $15K home buyer’s tax credit has apparently been removed from the stimulus bill. Some reports are coming in that the Compromise Committee has stripped all of the $15,ooo tax cut provisions from the bill that will now be voted on by the House and Senate and sent to President Obama for signature, probably by week’s end.
Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said.
It’s now 12:51pm MST and I’m listening live on FOX News to Senator Harry Reid, (D-NV) Senate Majority Leader announce a $789 billion compromise on the stimulus bill has been reached, but there is no substance as to what has been cut and what remains.
As best I can tell, the currently existing $7,500 tax “credit” for first time home buyers is not affected by this act. It remains as is (and it is really a zero interest loan, not a tax credit). More info on the $7,500 first time home buyer incentive is available at the IRS. We’ll need to get a look at the final compromise to know for sure.
I am so-not-a-fan of big government nor of the tax system in general. But if one is to believe what we’re hearing from Washington, we are teetering on the brink of a depression (and a total economic collapse if you believe what some are saying). To gut the “Stimulus” package of the one thing in it that might have helped kick start the real estate market makes no sense to me. Was it a perfect solution? Of course not. But the next time I hear some politico spouting “We’ve got to do SOMETHING! We can’t just stand by and watch!” I think I’m just going to unplug my TV and Internet connection.
Update: This whole thing is, of course, not quite over. Recall your High School civics class — the compromise bill still has to pass both houses of Congress and be signed into law. With the three Senate “Republicans” that crossed over and voted with the Democrats in the group that worked out the compromise, passage is all but assured. What we do not know is exactly what is in the bill. As soon as it’s made public, I’ll post it here on the blog.
Reuters is reporting that a smaller $7,500 credit may be in the compromised bill. And confusion will reign supreme once again. There already is an existing law providing first time buyers a $7,500 “tax credit” that is in fact an interest free loan. The original House version of the Stimulus bill repealed the requirement for that credit to be repaid, turning it into a true tax credit. I’m not even going to speculate what, if, or how this compromise bill will affect that, or create a new $7,500 credit. Because until we lay eyes on the text of the passed bill, speculation is all it will be.
Stay tuned…. 😉
15,000 Home Buyers Tax Credit Smoke and Mirrors