Extending First Time Homebuyer Tax Credit Still Under Consideration by Congress

Update (10/8/09, 2:30 PM): The U.S. House of Representatives voted unanimously to extend a first-time homebuyers’ tax credit for overseas military members through Nov. 30, 2010. The bill is now headed to the Senate for a vote. We will keep you posted.

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Original post:

As the first-time homebuyer tax credit is set to expire on Nov. 30, 2009, government officials are considering ways to extend the $8,000 tax credit to many military personnel, if not to all first-time home buyers.

As of this morning, a bill called the “Service Members Home Ownership Tax Act of 2009,” was in the House of Representatives awaiting a vote. The bill would extend the credit through 2010 for military personnel that have been out of the country this year.

Speaker Nancy Pelosi confirmed that Congress will consider extending the tax credit for first-time home buyers, according to The New York Times.

There are at least eight bills in Congress that call for some sort of extension of the tax credit.  Some call for a six-month extension, others for 13. Some would raise the credit to $15,000, and some would extend the credit to all homebuyers, rather than just first-time homebuyers.

Lobbyists and real estate groups have been working hard to get the tax credit extended. Most recently, the National Association of Homebuilders was in Washington D.C. testifying in favor of the extension, saying the credit helped stabilize the housing market.

On the flip side, there are several arguments against extending the tax credit including the cost of the program ($14.86 billion if extended, as-is, for one year, according to Zillow analysis).

Recently, Zillow.com conducted a survey to find out how many first-time homebuyers would be influenced to buy if the credit were extended. Our results showed that 18% of first-time homebuyers see the tax credit as their primary influence to buy. Based on our calculations, that would spur an additional 334,000 home sales. See more about the impact of extending the tax credit.

>> See if you qualify for the first-time homebuyers tax credit.