$15,000 Home Buyer Tax Credit Proposal Moves Through Senate

$15,000 Home Buyer Tax Credit Proposal Moves Through Senate
The U.S. Senate recently approved a proposal that would give home buyers a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Georgia Sen. Johnny Isakson, a former REALTOR, introduced the new tax credit as an addition to President Barack Obama’s economic stimulus package. Congress is expected to vote on the stimulus package this week, and it’s unclear which provisions will remain in the final bill.

Under the proposal, buyers would get 10 percent of the purchase price of any home, up to $15,000, applied to their tax bill. Anyone who buys a home within a year of the bill’s signature would qualify for the tax credit, and buyers would be allowed to spread out the credit over two years, if they wish. To deter speculators, buyers must occupy the house as their main residence for at least two years.

A tax break passed by the legislature last summer provides up to a $7,500 tax break to home buyers. However, that tax break is only for first-time home buyers and it must be repaid over 15 years. The National Association of REALTORS is currently lobbying Congress to offer this credit to all home buyers and to eliminate the repayment provision.

Real estate industry spokespeople are praising the proposed tax credit as an excellent way to improve the housing market and the economy. Steve Murray, publisher of the national real estate publication Real Trends, said, “Senator Isakson knows the housing industry better than any member of Congress, and this action is exactly the kind of directed action that will have an immediate positive stimulus on the economy. The sooner this amendment gets passed, the sooner the housing market will begin to show further signs of life.”