$15,000 Homebuyer Tax Credit Added to Stimulus Plan

• February 5th 2009

by Will Smith

Homebuyers will be pleased with a major new addition made last night to the stimulus bill currently winding through Congress. The Senate voted by voice to include a tax credit of up to $15,000 for new homebuyers that would be in effect for one year following the passage of the stimulus package. This measure represents substantially more incentive for homebuyers than the tax credit passed last year of $7,500 that has to be repaid over the course of 15 years.

The tax credit is estimated to add $19 billion to the overall package, which currently stands at around $900 billion. It was strongly favored by Republicans, who have chafed at the spending in the current version of the bill and prefer to see economic stimulus in the form of tax breaks and credits. Lawmakers on both sides of the aisle hope that the tax credit will rev up the beleagured housing market.

Republican Senator Johnny Isakson of Georgia, who was the leading sponsor of the new credit, argued that there is precedent for its success. From The New York Times:

Senator Isakson used his own experience selling homes during the housing crash in the mid-1970s to explain how such incentives spur sales. At the time, a bipartisan effort by President Ford and the Democratic-controlled House and Senate approved such a credit, which Mr. Isakson said helped stabilize the housing market. At a news conference earlier today, he called this type of initiative a catalyst that would fuel housing sales. That’s the way he said the cost of the additional tax credit would be offset — through reviving the real estate market.

For more on the tax credit, see The Washington Post, The New York Times, and The Associated Press.

This article originally published at https://dc.urbanturf.com/articles/blog/15000_homebuyer_tax_credit_added_to_stimulus_plan/525.