Housing Tax Bill Approved

The House Ways and Means Committee has approved a housing tax bill by a 35-5 vote that provides a $7,500 tax credit for first-time homebuyers, expands the use of revenue bonds to refinance subprime loans, and streamlines the low-income housing tax credit program. The tax bill also clears the way for Federal Home Loan Banks to guarantee general tax-exempt municipal bonds, not just bonds that are used to finance housing programs. Committee Chairman Charles B. Rangel, D-N.Y., said the vote shows there is "strong bipartisan support for this housing tax package designed to help families cope with the housing crisis." Like a tax provision in a Senate foreclosure prevention bill, the Rangel bill allows homeowners that take the standard deduction to deduct their properties taxes. However, the House bill does not include a controversial net-operating-loss carry-back provision for homebuilders and other companies suffering losses in 2008 and 2009, which is contained in the Senate bill. House leaders plan to combine the Rangel tax bill with a bill the House Financial Services Committee is expected to approve soon to refinance 1 million distressed homeowners into Federal Housing Administration loans.