Update 2-15-09: Final Stimulus Bill passed in Congress and set to be signed by the President on Monday. Congress decided not to go forward with the Isakson Amendment and produced a modified version of the current tax break for first time homebuyers. From Winners and losers in the final stimulus bill :
Homebuyers: First-time homebuyers who purchase this calendar year get an $8,000 tax credit which does not have to be repaid like a similar measure last year. This phases out for people making more than $75,000 individually or $150,000 jointly. "First-time homebuyer" is defined as someone who has not owned a home for the past three years. Cost: $6.63 billion.
2/05/09 Wednesday evening the Senate unanimously approved by voice vote to add the Isakson Amendment to the stimulus package. The Isakson amendment would allow home buyers a tax credit of up to $15,000 on home's purchased within the next year. From the article:
"We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what's happening now," Mr. Isakson said at a news conference.
"Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that's what I was doing to feed my family and make a living."
The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices, which caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in mortgage-backed assets.
The Senate is hoping for the final vote on the Stimulus package to happen Thursday. The problem they have to contend with is the cost. President Obama had set a limit of $900 billion for the total package, and it is believed that with this addition along with others, the package well exceeds that figure. Now they will be deciding which aspects of the stimulus package will be cut for it to proceed.