Wednesday, November 4, 2009

Isakson Praises Senate’s Unanimous Passage of Legislation to Extend, Expand Home Buyer Tax Credit

This Bill in the End Is a Jobs Bill’

U.S. Senator Johnny Isakson, R-Ga., today praised the Senate’s unanimous passage of his legislation to extend and expand the first-time home buyer tax credit. The legislation passed by a vote of 98 to 0.

“The key to returning stability to the economy lies within the housing market, and we have crafted a meaningful credit that will create a strong foundation for future growth and make a measurable difference over the next seven months in our economy,” Isakson said. “Tax credits like this only work by creating the sense of urgency to take advantage of them. This is the last extension of the home buyer tax credit, and I urge all Americans whether they're first-time buyers who’ve always dreamed of having a home of their own or someone who's been gridlocked in the failure of our move-up market to take advantage of this opportunity.”

Isakson has worked with Senate leadership over the last two weeks to expand the home buyer tax credit to include buyers in the “trade-in” or “move-up” market, because he believes the real housing recession is with homeowners who are delaying purchasing their next home. The amendment would establish a new $6,500 tax credit for “move-up” buyers so long as the home they are leaving has been their principal residence for five years or more.

“We are about to do something very meaningful for the American economy,” Isakson said shortly before the vote. “This bill in the end is a jobs bill.”

Isakson added his extension and expansion of the home buyer tax credit to legislation to extend unemployment benefits. The bill now goes back to the House.

Both the $8,000 first-time home buyer tax credit as well as the $6,500 tax credit for “move-up” buyers would sunset on April 30, 2010. However, individuals who have contracts as of April 30, 2010, would still qualify for the credit so long as they complete the transaction within 60 days. The amendment establishes income limits of $125,000 for an individual or $225,000 for a couple for both credits. The cost of the home being purchased may not exceed $800,000 in order to be eligible for the credit.

For purchases made in 2010, taxpayers would be able to claim the credit on their 2009 income tax return. Home buyers would not have to repay the credit, provided the home remains their principal residence for 36 months after the purchase date. However, this recapture provision would not apply in the case of a member of the Armed Forces, military intelligence or Foreign Service who is on qualified official extended duty. In addition, members of the military who have been deployed overseas for 90 days or more in 2008 or 2009 would have until April 30, 2011, to claim the home buyer tax credit.

The amendment also includes anti-fraud language that gives the IRS the authority to do greater oversight during the processing of the return rather than waiting for an audit situation. The amendment requires the taxpayer claiming the credit to be 18 or older, and requires a HUD-1 settlement statement to be attached when claiming the credit.

Isakson has pushed hard for a tax credit for home buyers since January 2008 because he knows that it will work. In the mid-1970s, America faced a similar housing crisis, and Congress responded by passing a $2,000 tax credit for anyone purchasing a new home for their principal residence. Isakson, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Isakson spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County, Ga., 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.
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