New Legislation to Remove Home Buyer Tax Credit Marriage Penalty
- Mar 19, 2010
Avondale, Ariz.–Representative Eliot Engel (D-NY17) recently introduced legislation that would amend the Internal Revenue Code of 1986 eliminating the so called ‘marriage penalty’ from the Home Buyer Tax Credit.
The National Association of Exclusive Buyer Agents (NAEBA) expressed support for the legislation. Benjamin Clark, 2010 president of NAEBA, says, “We applaud Rep. Engel’s leadership on this issue and fully support this legislation that will make the current homebuyer tax credit section of the Internal Revenue Code of 1986 more equitable for all potential home buyers.”
The current guidelines require both spouses to have the same exact ownership history in order to claim the tax credit, a standard that does not apply to unmarried couples, effectively penalizing married homebuyers.
The Worker, Homeownership, and Business Assistance Act of 2009 provides a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence and a tax credit of up to $6,500 for repeat home buyers who have owned a home for five consecutive years out of the prior eight years. The tax credit is available for eligible purchasers who are in contract by April 30, 2010 and close by June 30, 2010.
H.R. 4701, introduced by Representative Eliot Engel (D-NY17), will provide relief to certain married couples who would otherwise be ineligible for the first-time homebuyer credit. The bill provides that married individuals filing a joint return would qualify for the appropriate credit even where one spouse is ineligible. For example, if one spouse is a first-time homebuyer and the other is ineligible, the couple would be treated as first-time homebuyers. However, such a couple could qualify for up to $4,000.00, as opposed to the full $8,000.00 tax credit, had both spouses been first time homebuyers. The bill has recently been introduced in the House of Representatives.