Latest Homebuyer Tax Credit Voted by Senate is The Real Thing, Says NAHB

By Anuradha Kher, Online News EditorWashington, D.C.–The Senate voted yesterday to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000. The measure, introduced by Sen. Johnny Isakson, a Republican from Georgia, is expected to add as much as $18.5 billion to the already-massive stimulus package.This tax credit, unlike others proposed previously, is a real tax credit, according to the National Association of Homebuilders (NAHB), as long as it is claimed within two years. There is no automatic recapture of this money unless the buyer sells the property within two years of purchasing it. NAHB also confirms that there are no qualifying criteria for receiving the credit and any homebuyer is eligible for it, whether he or she is buying a single-family or multifamily property.The NAHB had called on Congress last year to create a temporary home buyer tax credit along with other important tax measures to boost the faltering housing market and economy.“The biggest bang for the buck most likely would be provided by a temporary home buyer tax credit,” NAHB Chief Economist David Seiders had told the Senate Finance Committee. “Tax credits for the purchase of a home are a means of eliminating excess inventory, relieving some of the pressure on falling housing prices and ending the waiting-on-the-sideline strategy some potential buyers have adopted in response to overly negative media stories concerning the future of the housing market.”The association continues to lobby in favor of a homebuyer tax credit.Meanwhile, Sheila Crowley, president of the National Low Income Housing Coalition (NLIHC), is urging Congress to re-examine its spending plans in the Economic Recovery Act. “If the country can afford to subsidize over a million families no matter what their income to buy new houses, surely we can afford to prevent a huge increase in the number of people who lose their homes altogether and become homeless,” she said in a statement. The Senate has not included any funding in the bill that will produce a single new unit of housing that is affordable to the poorest families in the country. The Senate bill does not capitalize the National Housing Trust Fund to build and rehabilitate rental homes that are affordable to low wage workers, the unemployed, the disabled and the elderly. Nor does the Senate bill provide funding for housing vouchers that would help low-income families afford to rent existing housing in the market.