Most of you know there has been, for about 9 months, a $7500 tax credit for first-time homebuyers for anyone that buys a house from April 2008 to July 2009.  The new “stimulus” package currently wending its way through Congress contains a modification of that credit.

The Senate version of the bill had an increase in the credit to $15,000, made it for ALL homebuyers, and removed the payback provision of the original.  The conference committtee, however, has downsized that credit to $8000, rolled it back to just first-time homebuyers, and protected only the 2009 January to August purchasers from repaying.  If you bought last year, in other words, you get another $500 but you still have to pay the credit back over 15 years.

Personally, I hate it when Congress does most anything, but this back-and-forth, you get the credit but you don’t silliness is not going to help the markets at all.

The credit is targeted at the wrong people, timed incorrectly, is a tax-accounting nightmare and overall one of the stupidest non-ideas I can remember.  And I like tax credits.

More here.