November 04, 2009
CARDIN LAUDS EXTENSION OF TAX CREDIT FOR FIRST-TIME HOMEBUYERS, NEW CREDIT FOR STEP-UP PURCHASES
Nearly half of all Maryland home purchases in 2009 have been by first-time buyers - up 10 percent
Washington, DC - U.S. Senator Benjamin L. Cardin (D-MD), co-chair of the Senate Real Estate Caucus and one of the authors of the first-time homebuyers' tax credit, today praised the Senate for its timely action to keep the $8,000 credit from expiring at the end of this month. In September, Senator Cardin led a group of Senators, including Johnny Isakson (R-GA), Harry Reid (D-NV), John Ensign (R-NV), and Debbie Stabenow (D-MI), introducing a bill to extend the first-time homebuyers' tax credit.
Today, the Senate passed the H.R. 3548, the Workers, Home Owners and Business Assistance Act , which included a provision Senator Cardin co-sponsored extending the first-time homebuyers tax credit and providing a new $6,500 tax credit for so-called step-up homebuyers who have been in their current home for the last five years. Both credits are designed to continue to provide a temporary boost to the housing market at a critical time in its recovery.
"The first-time homebuyers' tax credit has worked. In Maryland, it's estimated that nearly half of all home sales in 2009 are to first-time home buyers. Nationwide, it has triggered hundreds of thousands of sales that would not have happened if not for this tax credit. While there are signs the housing market is stabilizing, there is much more to be done. The credit has succeeded in lessening the glut of homes for sale but our economy is still hurting.
"Our current economic circumstances made it critical that we extended this temporary tax credit so that homebuyers, particularly new homebuyers, would have the confidence to get off the sidelines and into the market now. A healthy real estate market is essential to pulling us out of this recession and growing our economy.
"I am pleased that this short-term extension and expansion of the homebuyers' tax credit is fully paid for. It will not add to our deficit and it will further help our economy through direct and indirect spending and investment. It also includes tough, anti-fraud language to ensure that the credit is provided only those families who qualify. "
Representatives from the IRS testified before Congress last month that at least 1.5 million individuals or families had applied for the first-time home buyer tax credit. As many as 40 percent of all homebuyers this year will qualify. Estimates vary, but the credit is directly responsible for 200,000 to 400,000 purchases this year. According to the National Association of Realtors, those additional sales have pumped approximately $22 billion into the economy.
The substitute amendment - which Senator Cardin co-sponsored and which is similar to the bill he introduced (S. 1678) - extends and expands the credit to April 30, 2010 for binding contracts and allows 60 more days for settlement. The $8,000 credit remains in place for first-time homebuyers. A $6,500 credit is available to other homebuyers who have lived in their current homes for the last 5 years.
- The credit is available for homes costing up to $800,000.
- The income limits at which the credit is phased out have been lifted from $75,000 to $125,000 for individual filers and from $150,000 to $225,000 for joint filers.
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