On October 30th, the Wall Street Journal reported that a Senate committee has reached a compromise on extending and expanding the $8000 tax credit for first-time buyers due to expire on November 30th.
While the compromise still must be passed by the full Senate, this agreement would extend the existing credit for first-time buyers, while offering a new credit of up to $6500 for some existing homeowners. This reduced credit would be available to all homebuyers who have been in their current residence for a consecutive five-year period in the past eight years.
Washington lawmakers also raised the qualifying income limits to $125,000 for single taxpayers and $250,000 for joint taxpayers from the current $75,000 and $150,000. Under the Senate compromise, buyers must have accepted contracts by April 30th and closed escrows by June 30th.
The new provisions are aimed at broadening availability of the credit beyond first-time buyers and giving the weakened real estate market a bigger boost while preventing real estate investors from benefitting. While Senate lawmakers appear to have reached a deal on the substance of the tax credit, they are still at odds over how it would be brought to the Senate floor. The measure still faces votes in the full Senate and House.