Wednesday, January 30, 2008

Isakson Introduces Legislation Offering Tax Credit to Homebuyers

Drawing on more than three decades of experience in the real estate industry, U.S. Senator Johnny Isakson, R-Ga., today introduced legislation to provide a $15,000 tax credit spread out over three tax years for anyone purchasing a new home, a foreclosed home or a home where foreclosure is pending. Isakson said he believes such a tax credit would provide an immediate boost to the housing market and to the nation’s economy, just as a similar tax credit did in the mid-1970s.

Co-sponsors of Isakson’s legislation include Senators Judd Gregg, R-N.H., Wayne Allard, R-Colo., Saxby Chambliss, R-Ga., and Larry Craig, R-Idaho.

“Our country and our economy face a serious challenge in the next 12 months. The number of unsold new homes and foreclosed resale homes will reach unprecedented numbers. Lenders will be forced to liquidate their real estate holdings, which will result in lower home values and less equity for homeowners,” Isakson said. “Today, we need the same bold incentive to restore the housing market and consumer confidence. Just as it did in the mid-1970s, this proposal will reduce inventories, reduce foreclosures and stabilize market values.”

In the mid-1970s, America faced a similar housing crisis when a period of easy credit and loose underwriting flooded the market with new construction. Interest rates rose, the economy slowed and America was left with a three-year supply of vacant homes. Congress responded by passing a $6,000 tax credit spread out over three tax years for anyone purchasing a new home for their principle residence. Isakson believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Specifically, Isakson’s legislation, S.2566, will provide a direct tax credit for the purchase of a single-family home in the amount of $5,000 a year for three years on homes purchased between March 1, 2008, and February 28, 2009. Buyers must occupy the homes as their principle residences to be eligible, and purchases of homes from investors or by investors are ineligible.

Homes eligible for the tax credit include:
· New homes where the building permit was issued and construction began on or before September 1, 2007;
· Owner-occupied homes whose first mortgage loan is in default; and
· A single-family home that has been foreclosed on and is owned by the mortgagor or its agent.

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.

No comments: