The U.S. House of Representatives on Tuesday approved giving extra time to thousands of homebuyers trying to get a popular federal tax credit by the end of the month.
The House backed by a vote of 409-5 a measure to extend the closing deadline to Sept. 30 for buyers who already met the April 30 deadline to have a signed contract. The current deadline requires those buyers to close the transaction by June 30 to receive the $8,000 tax credit for first-time homebuyers.
The Senate must still approve the measure before President Barack Obama can sign it into law.
Senate Majority Leader Harry Reid sought earlier this month to attach a companion proposal to a separate effort to extend insurance benefits to unemployed workers but the overall measure was rejected by the Senate.
Reid is expected to find another way for the Senate to consider the popular measure, though it remains unclear precisely how he would do that.
Reid, a Democrat, faces a tough re-election fight in Nevada, where the U.S. foreclosure crisis is most pronounced.
Real estate agents say thousands of settlements may not be completed by Wednesday because settlement offices are slammed with buyers trying to close on transactions by the end of this month in order to receive the funds.
“Up to 180,000 homebuyers will now receive the tax credit they deserve, and our housing market will be strengthened as a result,” House Speaker Nancy Pelosi said in a prepared statement after the lower chamber approved the measure.
Critics say the three-month extension is an invitation for fraud, providing prospective home buyers time to back date contracts to a date before April 30 and subsequently closing on those contracts by the new September 30 deadline.
Congress extended the $8,000 tax credit for first time homebuyers last fall and added a $6,500 tax credit for all buyers who were purchasing a primary residence.
Source: Corbett B Daly
Contact firstname.lastname@example.org OR Call 972-961-4813, India +91-80-41633973, if you are looking for professional advisory services.
Disclaimer: GVA is not an attorney or attorney firm. GVA has partners for Estate Planning services. Unless we expressly state otherwise in this post any tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or other matter addressed herein.