Potential home buyers all around the country, myself included, are waiting anxiously for the political pundits in Washington to enact something that will breathe some life into the housing market. No question there probably isn’t a single action that is going to miraculously lift us out of “housing market hell”, but something has got to be done, and done soon.

Initially, and I’m sure we’re all sick of hearing about the Congressional wrangling that went on, there was a $15,000 tax credit for home buyers. The $15,000 tax credit part was cut out of the bill over the past weekend, reducing it to an $8000 tax break for first-time home buyers only, good through Dec 1.

Similar legislation was passed by the House just last month. The bipartisan amendment to the stimulus plan originally proposed the $15,000 tax credit which would be available to all purchasers of a primary residence. This differs from the $7500 tax credit enacted last year, which was only available to first-time home buyers and was in essence an interest-free loan that required repayment over a period of up to 15 years. The $15,000 tax credit, which was rumored to be planned effective for one year from the date of enactment, would not have to be repaid, and buyers could claim it against their 2008 and/or 2009 tax returns. The existing $7500 tax credit is set to expire July 1, 2009.

Other major bullet points for the plan that are expected to provide assistance to recovery for housing and small businesses:

• Increase bonus depreciation and Section 179 small business expensing
• Provide $2 billion in gap financing for the Low Income Housing Tax Credit (LIHTC) program and accelerate credit claims for LIHTC investors
• Provide a maximum 10-year deferral period for income taxes associated with  restructured or canceled business debt
• Extend the New Markets Tax Credit
• Allow a five-year carry back for net operating losses
• Provide an Alternative Minimum Tax patch for 2009.

The National Association of Home Builders estimates that the $15,000 tax credit could significantly boost home sales, as well as create more than 255,000 jobs. But apparently, the Senate is not in agreement… sadly.

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