Tax credit legislation seeks to broaden program’s reach
Since first-time buyers are getting thousands of dollars in tax credits from the federal government to stimulate the economy, why shouldn’t all home buyers get equal treatment? What about refinancers -- couldn’t they make good use of a tax credit to help defray closing costs and loan fees?
Whatever your thoughts on these questions, there is an effort under way in Congress to extend tax credits to anyone who buys a new or existing home in the coming year. In one case, legislation would even create a temporary $3,000 tax credit to help defray the costs of refinancing mortgages on principal residences.
Two Dallas-area congressmen have introduced bills that not only would broaden the reach of the current housing tax credits to almost everyone, but would keep the program going until either mid-2010 or the end of that year.
Rep. Kenny Marchant, a Republican who represents the suburbs between Fort Worth and Dallas, is pushing a bill that would expand the current $8,000 federal credit for first-time buyers, which expires Nov. 30, to buyers of all houses through June 2010.
The bill would also create a $3,000 credit to help offset refinancing costs, including closing fees and lender charges, through next June.
As for the refinancing credit, he said the idea was to encourage owners “to take advantage of current low mortgage rates.” The $3,000 credit could be used to pay for loan points, other transaction fees or to “put equity in their home if they’re a little underwater.”
Marchant’s colleague, Rep. Eddie Bernice Johnson, a Democrat who represents downtown Dallas, has introduced legislation that would extend the current credit through Dec. 31, 2010. The bill also would open the credit to all buyers of principal residences.
The near-simultaneous introduction of tax credit expansion bills on Capitol Hill appeared to put the two most potent housing lobbies -- the National Assn. of Realtors and the National Assn. of Home Builders -- into a political quandary.
On one hand, any broadening of tax incentives for home buying would be good news for their builder and realty broker members. But if potential buyers sense that the expiration date for the current credit might be extended, some of them may decide to delay purchases. And if all would-be buyers might be eligible for a future tax credit, large numbers of consumers might stay on the sidelines waiting for that better deal to come out of Congress.
A spokesman for the National Assn. of Home Builders said the group “does not want anything that would stop the traction the current credit is now getting. We think it would be more appropriate to address [an extension or other changes] closer to the credit deadline” in the months ahead.
But Mary Trupo, public policy director for the National Assn. of Realtors, said her 1.1 million-member group sees it differently. If the credit is working for first-time home buyers, “then why not for all buyers, with no income limitations?” she said, adding that the group would like to see the expiration date extended beyond Nov. 30.
Where’s this all headed? Don’t look for any immediate action on Capitol Hill. The summer recess looms and neither of the tax credit bill sponsors sit on the Ways and Means Committee, which must originate all tax legislation.
But later this year, you can bank on it: There will be a major push to extend the housing tax credit -- and maybe even open it up to everybody.
Distributed by the Washington Post Writers Group.
