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Some interesting news about a possible extension of the $8,000 first-time home buyer tax credit came out today, according to CNBC’s Diana Olick. A senate vote could come as early as this week, but the credit may take on a slightly different different form. The plan under consideration is sponsored by Senate Majority Leader Harry Reid and Senate Finance Committee Chairman Max Baucus. Here is how it would work:

  1. For first-time homebuyers who purchase a home between Dec. 1 2009 and March 31, 2010: The credit would be as it is now, worth a maximum of $8,000.
  2. For those who buy between April 1, 2010 and June 30, 2010: The credit value would fall to a maximum $6,000.
  3. For those who buy between July 2, 2010 and Sept. 30, 2010: The credit value would fall to a maximum $4,000.
  4. For those who buy between Oct. 1, 2010 and Dec. 31 2010: The credit would  go down $2,000, but it’s unclear when it would end.

This incarnation of the credit would also raise the income cap to $300,000 for joint filers from the current level of $150,000.

There have been other proposals concerning the tax credit, but they’ve run into some roadblocks. Sen. Johnny Isakson and Sen. Chris Dodd’s tax credit bill amendment, which would have extended the credit until June 30, 2010 for everyone (not just first-time home buyers) and increase income limitations to $300,000 per couple was called too expensive by Concept Capital’s Washington Research Group, which estimated the cost of that program at $17 billion.

The proposed amendment will be offered to the Legislature Tuesday with the goal of having it pass the Senate on Wednesday and the House on Thursday. We will keep you posted.

About the Author

Alison writes about rental and mortgage market trends for Zillow Blog.

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