REP. CALVERT INTRODUCES BILL TO PROVIDE HOMEBUYER TAX CREDIT

Bill Would Create Demand in Housing Market

WASHINGTON, D.C. March 10, 2009 – Last week Rep. Ken Calvert (R-CA) introduced H.R. 1245, the Homebuyer Tax Credit Act which is would stimulate the nation’s declining housing market by offering a $15,000 tax credit to individuals who purchase a home in the next year.

“We must create demand in the housing market and rather than forcing down the principals of mortgages, Congress should provide monetary incentives for purchasing a home,” said Rep. Calvert. 

The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation’s enactment, and the tax credit would not have to be repaid. The bill also seeks to prevent misuse by only allowing purchases of a principal residence and by recapturing the credit if the home is sold within two years of purchase. The legislation would sunset the current $8,000 housing tax credit on the date of enactment.

During consideration of the economic stimulus bill, the U.S. Senate unanimously approved an amendment by U.S. Senator Johnny Isakson (R-GA) for a similar $15,000 tax credit.  Unfortunately, the final stimulus bill continued to limit the tax credit to only first-time homebuyers and increased the credit to $8,000.

Economic Benefits

The $15,000 homebuyer tax credit will result in nearly 500,000 additional home sales and create 255,000 new jobs in the year ahead, according to research conducted by the National Association of Home Builders (NAHB).

In addition to the 255,000 jobs created during the first year, NAHB estimates that the additional half million home sales will generate:

·        $12.3 billion in wages and salaries,

·        $9.7 billion in net business income,

·        $6.6 billion in federal taxes, and

·        $2.1 billion in state and local taxes.

The $15,000 homebuyer tax credit will stimulate housing demand, stabilize home values, slow the rate of foreclosures and shore up mortgage portfolios held by financial institutions, all of which will strengthen confidence generally and generate even more economic activity.

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