Homebuyer Tax Credit: Closing Date Extension Gets Senate OK

Homebuyers who took advantage of the $8,000 federal tax credit but are unable to close by the June 30 deadline may have gotten a reprieve yesterday.

On Wednesday afternoon, the Senate OKd a proposal to add three more months to the closing schedule of the tax credit program, extending the deadline until September. The extension applies only to sales that went to contract by April 30.

The amendment to a bill related mostly to unemployment insurance benefits, HR 4123, was ratified in a 60-37 vote, with support falling primarily along party lines, with only four Republicans voting for it and one Democrat voting against it.

The House and Senate both passed earlier drafts of the bill in December and March, respectively.

Sen. Harry Reid (D-Nev.) was the sponsor of the latest amendment, which will likely benefit seriously depressed housing markets such as his own state's Las Vegas.

"While I am disappointed that more Republicans did not support this commonsense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law," said Reid.

The amendment has been strongly supported by the National Association of Realtors, but some critics say it may help people who are looking to cheat on their taxes. Some buyers might pretend they were already under contract by April 30 by backdating their paperwork.

For the amendment to become law, the House and Senate must reconcile their bills. So if you signed a contract by April 30 but are having trouble closing do to system glut, stay tuned for what likely will be a quick decision. With the housing market still teetering, any move that may help sales numbers is likely to get Congress' attention.

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