Housing tax credit added to stimulus

Price reduced on a home in Miami

TEXT OF STORY

Renita Jablonski: The Obama administration is still hoping to get people to work with programs included in the massive stimulus package. And the Senate is still adding to the plan. It's totaling something like $920 billion right now. Last night, Senate Republicans passed an amendment for a tax break on home purchases. Marketplace's Dan Grech has more.


Dan Grech: If you're thinking about buying a house as your primary residence, how about this for a sweetener: A tax credit of up to $15,000. The Senate passed that amendment by unanimous voice vote last night. It would replace the current subsidy, which is $7,500 and only for first-time homebuyers.

James Angel is a finance professor at Georgetown. He says the tax perk is aimed at folks in the middle class who are on the knife's edge of being able to afford the down payment on a mortgage.

James Angel: By putting this $15,000 subsidy onto every home purchase, you're going to stimulate home sales. And this pickup in activity may help the market turn around.

If approved, the new tax break would expire in one year. It would cost $19 billion. That would balloon the total stimulus to $920 billion.

Angel: This will help the people who want to buy or sell a house this year and the realtors. The rest of us are going to pay for it.

A Senate vote on the stimulus package could come as early as tonight.

I'm Dan Grech for Marketplace.

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