A group of Senators, including Senate Banking Committee Chairman Chris Dodd, are moving to extend the $8,000 first-time homebuyers tax credit and extend it to all homebuyers.
Sen. Johnny Isakson (R-GA) who had previously owned a real estate company before being elected as Georgia’s junior Senator, told the Senate banking committee on Wednesday that the real estate market would likely remain depresses for five years or longer if the government doesn’t step in to encourage slow home sales and make additional moves to decrease unemployment.
Isakson recommended to the committee that Congress extends and expands the credit by increasing the eligibility limit to $300,000 to bring more buyers into the housing market.
Chairman Dodd is hoping to stimulate homebuyers that are “moving on up” by encouraging people to upgrade from their first-home to a more expensive one. Dodd said, with first-timers, “You’re living on a futon in a…bare bones deal, because you — you got that house…and you’re trying to make ends meet,” Dodd continued, “It’s that move-up market, where you start to get what I call sort of a ripple effect, that is always so important in housing.”
The senate had previously considered applying the tax credit to all homebuyers this year, but threw out the idea because it was deemed to be too expensive. Isakson estimated that his proposal would cost the government $16.7 billion in lost revenue but would have a multiplier affect many times that in home improvement investments, as well as furniture and appliance purchases.
