Homebuyer Tax Credit Closer to Extension

Homebuyer Tax Credit Closer to Extension

November 3rd, 2009

An $8,000 federal tax credit for first-time homebuyers that is set to expire at the end of the month inched another step closer to getting extended until April. The Senate voted 85-2 yesterday to move the bill to a final vote, and senior members of Congress said that they expected the bill to pass next week.

In what officials say is a move to stimulate the economy, the measure might even be expanded to give a $6,500 tax credit to homebuyers who have lived in their previous home for at least 5 years.

Prolonging the tax credit is sure to be welcomed by home builders like Toll Brothers and KB Homes, as well as financial institutions like U.S. Bank, whose mortgage-revenue rose nearly 5% last quarter.

The vote comes only weeks after tax officials testified that they received 90,000 bogus claims for the $8,000 credit. Some 1.4 million legitimate claims have been filed, totaling approximately $18 billion in tax credits.