New Homebuyer tax credits proposed

Congress once again is considering new tax credits intended to lure wary homebuyers into the nation's sagging housing market.

Washington lawmakers have proposed several separate bills laced with housing incentives. The plans differ, but key elements include:

  • Near doubling of tax credit.Sen. Johnny Isakson, R-Ga., has introduced a bill that would sweeten the current $8,000 homebuyer tax credit to $15,000. The bill has picked up a slew of co-sponsors, including Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee. 
  • Expanded pool of eligible purchasers. Isakson also wants to allow "any buyer of any home" -- including move-up buyers and purchasers at every income level -- to claim the tax credit. Currently, the credit is restricted to first-time purchasers. Two House bills also propose expanding credit eligibility to all homebuyers.
  • Extended tax credit deadline. Various proposals would keep the first-time homebuyer tax credit alive through at least mid-2010. Right now, the credit is scheduled to expire at the end of the year.
  • New refinance tax credit.Rep. Kenny Marchant, R-Texas, has introduced a bill to give a $3,000 tax credit to homebuyers who refinance the mortgage on their primary residence.  Marchant champions the credit as a free-market-friendly approach that helps people refinance "without picking winners and losers."

These all seem to be great incentives to get the real estate market churning again but I have found that many Franklin, Massachusetts area buyers had not even been aware of the initial up to $8000 tax credit money and most had no idea that they could take the money up front without any repayment.  While there are many affordable homes, and low mortgage rates, it seems evident that those prospective buyers facing an uncertainty with their jobs will not venture into homebuying.  However, for those with secure jobs the current government incentives are worth becoming informed about.  Yes, the tax credit money is there, for FREE, and can be used up front in buying a home. You will want to speak with a mortgage broker about the details as you sit down to get a pre-approval letter.