The price tag for the economic stimulus package Congress is developing got a $19 billion bump Wednesday when the Senate approved doubling the housing tax credit to $15,000 and expanding it to include all homebuyers, not just those buying their first home.
The proposal would create a credit worth 10 percent of the value of a new or existing home, and is capped at $15,000, up from the $7,500 first time homebuyer tax credit already in place. The credit would not have to be repaid so long as the homeowner stays in the home for three years, and would be available for a year after the legislation is put into law.
Georgia Sen. Johnny Isakson, who proposed the amendment, said, “It is time to fix housing first. We have a pervasive housing problem, and we have a historical precedent that works.”
Isakson is referring to a $2,000 tax credit Congress passed in the mid-1970s, when market conditions led to a housing crisis that left the country with a three-year supply of homes.
The credit comes one day after the Senate voted to give a credit to new car buyers.