WASHINGTON (CNN) – Two U.S. senators on Thursday confirmed a bipartisan deal intended to extend the first-time homebuyers' tax credit that was originally passed earlier this year as part of the economic stimulus bill.
Democratic Sen. Christopher Dodd of Connecticut and Republican Sen. Johnny Isakson of Georgia told a news conference the plan would help the U.S. housing market at a time of decreased home values that have contributed to the economic recession.
The original credit in the stimulus bill is set to expire at the end of November and offers a tax credit of $8,000 to first-time homebuyers.
Under the agreement announced by Dodd and Isakson, proposed legislation that must pass both chambers of Congress and then be signed by President Barack Obama would extend that $8,000 credit for first-time buyers until the end of next April. In addition, the measure would add a separate $6,500 credit for some current homeowners who buy a new residence by then.
To qualify, current homeowners must have lived in their primary residence for five continuous years. The deal also would increase the maximum income for participants from $75,000 for an individual and $150,000 for a couple to $125,000 for an individual and $225,000 for a couple.
Isakson said the bill would cost $10.2 billion and generate a $10.5 billion payoff to the U.S. Treasury for a net gain of almost $300 million. He emphasized the tax credits would end next year, so Americans must act now to benefit from them.
"Tax credits like this only work by creating the sense of urgency to take advantage of them and to bring the market back," Isakson said. "So the American people and the potential homebuyers of the United States, and home-sellers, for that matter, have an opportunity, in the next seven months, to take advantage of a once-in-a-lifetime credit, and help us bring the housing market back to some sense of vitality."
Dodd said extending and expanding the homebuyers' credit would "make a difference to so many middle-income families." He said most people rely on home equity for their wealth, and noted 15 million U.S. homes had mortgages exceeding their value with thousands of foreclosures occurring every day.
"This isn't the only answer, obviously," Dodd said of renewing the confidence of consumers, "but I think at a time when that's been lagging and sagging, this can help."
Senators have not agreed on how the tentative deal would come up for a vote, but sources from both parties said they are considering adding the housing credit to a bill that would extend unemployment benefits.
On the House side, Speaker Nancy Pelosi has indicated she also is interested in extending the homeowner credit, but House leaders have yet to endorse any one bill.
Great I hope people are taking advantage of this bill. It will help the economy
Again, the government is interfering in the markets by propping up housing sales with tax payer money. This is how we got into this mess in the first place (Gov't interfering in the markets). What is going to happen to the housing market, and to the values of the houses now being sold through these programs, when the government is no longer extending the credits? And the money the gov't does make ($300M) won't even cover the YTD fraud they have already uncovered... Two years from now we will be talking about just how bad of an idea this was...
What a country....hold your hand out and get money. Dodd got his sweetheart deal why shouldn't everyone else?
Out of curiosity, why do homebuyers get a tax credit, while millions upon millions of renters get none? Are we in any way less productive in this economy? Are we less patriotic? Are we not paying our fair share of taxes?
This seems somewhat familiar, where have I seen this before, the government pushing people to buy stuff they can't afford.
LOL, spend that money print some more and spend that to. I do know that there are people out there that need help like this but then there are some out there that can't even make it from day to day and our taxes are paying for them a fine ass house and then some but the ones that need it the most are still homeless
GOD BLESS AMERICA AND THE PEOPLE!!!!!!!!!!!!!!!!!!!!!!!!
if I can still say GOD
At least it is an incentive I may qualify for. That will be a first.
This is a good thing. :-) Congratulations to bipartisanship.
THIS IS A GOOD THING
This particular $8,000.00 tax incentive has proven to be a powerful tool to stimulate home purchases. When people buy homes:
(1.) it spurs the economy and eventually down the road these home buyers pay state and local property taxes,
(2.) which helps fill the governments pocket,
(3.) which spur more government incentives to do more things to spur the national economy.
Keep on spending that money. In response to D. Tree, I am lower middle class and I can assure you I never received a tax cut under Obama the fact is I now pay more thank you very much. Obama forgot to mention that all that change he was talking about during the campaing was all that anyone's going to have left by the time he gets through.