Congress, specifically the Senate, is looking at extending the first-time (and others) homebuyer credit yet again.
Say it ain't so!
OK, it's not a total extension. The latest proposal would be to give prospective buyers who had a contract in hand by April 30 until Sept. 30 to close on the sale. In case you forgot, the current closing deadline to qualify for the $8,000 tax credit is just a few weeks away, June 30.
This latest tax extension proposal comes from Georgia Sen. Johnny Isakson. The Republican lawmaker was a real estate professional before going to Washington, D.C. He wants to add the homebuyer provision to the the American Jobs and Closing Tax Loopholes Act of 2010.
That awkwardly named bill is more commonly known as the tax extender measure. It's the legislation needed to put some tax breaks that expired at the end of 2009 -- such as the popular deductions for state and local sales taxes, tuition and fees, educators' out-of-pocket classroom expenses and the ability of some homeowners to deduct a portion of property taxes without itemizing -- back on the tax books.
The big problem with the entenders is the House and Senate are at odds at how to pay for resurrecting the expired tax breaks.
Isakson's proposal wouldn't produce any unexpected costs since it would apply to those folks who already had a sales contract in hand on April 30. Still, some folks (including me) say it's time to just let this tax break fade away and allow the housing market to right itself on its own.
But Isakson has some unexpected help in his latest homebuyer credit effort. Joining him is Democratic Majority Leader Harry Reid. Yep, finally some, albeit minimal, bipartisanship on Capitol Hill.
Why the aid from the loyal opposition? Reid represents Nevada, a state hit particularly hard by the real estate downturn.
Reid's also facing this November what many political pundits are calling the toughest re-election battle sort of his legislative career.
Not that I'm overly cynical, but helping out Nevadans who are trying to get a tax break, not to mention pleasing the powerful housing lobby, just weeks before voters go to the polls probably wouldn't hurt Reid's chances.
Will the credit be extended? Who knows. Congress has a bad habit of waiting until the very last minute to do anything and even if June 30 passes, lawmakers could make any homebuyer credit changes retroactive.