Congress Passes Housing Legislation

Following a House vote on July 23, 2008, the Senate, on July 26, 2008, by a vote of 72 to 13, passed the Housing and Economic Recovery Act of 2008. The legislation addresses the housing and mortgage crisis and includes a tax title. Included in the tax title of the legislation are: an additional standard deduction for property taxes for homeowners who do not itemize; a new refundable and recapturable tax credit for first-time home buyers; an increase in funding for mortgage revenue bonds and in the amount of federal low-income housing tax credits; repeal of the AMT limitations on tax-exempt housing bonds, low-income housing credit, and the rehabilitation credit; REIT modernization rules; some GO Zone incentives; and a provision for AMT and R&D Credit monetization.

Revenue offsets for the legislation include expanded information return reporting on merchant payment card transactions, a restriction on the sale of a principal residence exclusion to reflect the time the home was used as a vacation or rental property, a delay in implementation of worldwide interest allocation rules, and modifications to corporate estimated tax due dates for large corporations.

The legislation now moves to the White House for the President’s expected signature.