The House yesterday unanimously approved extending the first-time home buyer tax credit for some members of the military.
H.R. 3590, or the Service Members Home Ownership Tax Act of 2009 (blogged about in Housing tax topics roundup) would extend the $8,000 tax break through Nov. 30, 2010, for service personnel stationed overseas during the 2009 tax year.
The credit's repayment provision --
The 416-0 House vote now puts pressure on the Senate to do the same. Word is that Senate Finance Committee leadership supports the House bill, but there's no indication as to just when H.R. 3590 might be considered on the other side of Capitol Hill.
Civilian extension? The House vote also gives us an idea of what might happen for civilian first-time home buyers.
Representatives and Senators would be hard-pressed to increase the credit amount -- $15,000 is the limit that some folks are seeking -- for you and me while leaving it at $8,000 for, as bill sponsor and House Ways and Means Chairman Charles Rangel (D-N.Y.) put it, making "sure that the brave men and women who put their lives on the line every day get to enjoy the same benefits as every other American who benefits from their service."
If I had to bet, I'd say this means the credit will be extended, probably for a year, but not increased and not expanded to all home purchasers.
Of course, we also have to remember that next year is midterm election time. Not to keep beating this horse, but some lawmakers who are in competitive re-election races might find adding to the deficit (if, on the House side, they can work around pay-go rules) is a small political price to pay when it is offset by tax benefits for potential voters.
About that deficit: The military home buyer bill passed the House because its $320 million price tag (which also includes some other tax incentives for military service homeowners) would be offset by higher failure-to-file penalties for businesses.
Coming up with more millions to cover another year of civilian home buyer tax breaks will be a challenge.
I suspect lawmakers would like to keep the amount of additional taxes they'll have to raise as low as possible, even when the taxes are for something as sacrosanct as homeownership.