The Isakson-Lieberman amendment would stimulate demand for housing by greatly enhancing the first-time home buyer tax credit. Specifically, the amendment would:
• Double the maximum amount of the credit from $7500 to $15,000.
• Extend the home buyer tax credit to all home buyers, not just first-time home buyers.
• Allow taxpayers to claim the credit on their 2008 income tax return, thus providing immediate tax relief and stimulus to the economy.
• Repeal the current law requirement that the credit be repaid over 15 years.
• Extend the credit for one full year from the date of enactment (the credit in the underlying bill does not apply to any home purchases made after August 31, 2009).
• Prevent abuse by: (1) only allowing the home buyer credit for purchases of a principle residence, not houses purchased by investors purely for speculative purposes, and (2) recapturing the credit if the home is sold within 2 years of purchase.
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