Thursday, February 5, 2009

The U.S. Senate
on Wednesday unanimously approved an amendment to the economic stimulus
bill by U.S. Senator Johnny Isakson, R-Ga., that gives a $15,000 tax
credit to anyone who buys a home in the next year.

Isakson’s amendment would provide a direct tax credit to any
homebuyer who buys any home. 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 amendment would allow taxpayers to claim the credit on their
2008 income tax return. It also seeks to prevent misuse by only
allowing purchases of a principle residence and by recapturing the
credit if the home is sold within two years of purchase. The amendment
would sunset the current $7,500 housing tax credit on the date of

“It is rare that we have a road map to success in times of
difficulty, but this country has once before realized a housing crisis
every bit as bad as the one we have today and economic troubles every
bit as dangerous,” Isakson said. “We have a pervasive housing problem,
and we have a historical precedent that works. I am proud this Senate
has joined together, learned from history and repeated a method that
worked by adopting this amendment.”

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 $2,000 tax credit for anyone purchasing a new home for
their principal residence. Isakson said he believes the results were
clear and swift as home values stabilized, housing inventory dropped
and the market recovered.

Isakson has not made a decision about his vote on the overall economic stimulus legislation.


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