The National Association of Home Builders (NAHB) has applauded Senate passage of economic stimulus legislation that would help boost employment and tackle the housing and economic crisis head-on by expanding the home buyer tax credit.
"The enhanced $15,000 tax credit offers a powerful incentive for home buyers to get off the sidelines and represents the best opportunity for economic recovery," said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. "Congress must make sure that the full $15,000 tax credit remains in the final stimulus plan."
The bipartisan amendment to the stimulus package, offered by Sens. Johnny Isakson (R-Ga.) and Joe Lieberman (D-Conn.) and approved by unanimous voice vote, would create a $15,000 home buyer tax credit available to all purchasers of a principal residence for one year after its date of enactment. The tax credit would not have to be repaid and buyers could claim it against their 2008 and/or 2009 tax returns.
The $15,000 home buyer tax credit would replace and sunset a much narrower tax credit that was enacted last year. Available only to first-time home buyers, the current $7,500 tax credit works like an interest-free loan that must be repaid over a 15-year period. It is set to expire on July 1.
Extending and expanding the home buyer tax credit will spark the activity the economy needs to stop shedding jobs and begin creating them, said Robson.
"Increasing demand for housing will create jobs and help reduce excess inventory, stabilize home values, mitigate foreclosures, bolster consumer confidence and set the stage for a broader economic recovery," said Robson.
NAHB estimates that the $15,000 tax credit would boost home sales by almost 500,000, create more than 255,000 jobs, generate $12.3 billion in wages and salaries and increase federal, state and local tax revenue by $8.7 billion.
The Senate bill also includes several other provisions that will help small businesses and bolster the housing market. The legislation would:
• Increase bonus depreciation and Section 179 small business expensing;
• Allow a five-year carry back for net operating losses;
• Provide $2 billion in gap financing for the Low Income Housing Tax Credit (LIHTC) program and accelerate credit claims for LIHTC investors;
• Provide up to a 10-year deferral for income taxes arising due to cancelled or restructured business debt;
• Extend the New Markets Tax Credit; and
• Provide an Alternative Minimum Tax patch for 2009.
To lead the economy back to higher ground, Robson said that House and Senate conferees must ensure the $15,000 home buyer tax credit remains intact and is part of the final legislative package.
"The $15,000 housing tax credit has strong support on Main Street and will start working the day the bill is signed into law," he said. "It offers the best chance to revive housing and the U.S. economy."
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