A piece of legislation that could have a major and positive impact upon the real estate market was in the news this week and I couldn't help but think that maybe, just maybe, the folks in Washington have finally come up with something to possibly get excited about.
There is currently an $8,000 tax credit (not deduction) available to any person with an adjusted gross income below $75,000 ($150,000 for joint filers) who buys a home for personal use before December 1, 2009. The one stipulation is that he or she not have purchased another primary residence within the last three years.
The current law replaced the earlier one from 2008, in which people who bought homes were given a $7,500 loan that had to be paid back over 15 years, and probably made a lot of people with they had waited until the new law began in 2009.
Now, however, Uncle Sam may be ready to serve up an even juicier piece of legislation. Yes, it's true, Uncle Sam wants you to buy a home! And not just the primary residence.
This past week, Senator Johnny Isakson from Georgia introduced a bill that would provide not just $8,000, but a $15,000 tax credit to any person who buys a home of any kind. That's right - the home can even be investment property, or perhaps that second home in the mountains you've been dreaming about for years. Furthermore, under the proposed legislation, there are no longer any income restrictions. This is a very striking piece of legislation, and one that could have a major impact upon the housing market.
The legislation would extend the tax credit for one year from the date of enactment, and would still allow homebuyers to claim the credit on their 2009 tax return for purchases made in 2010.
Senator Isakson had brought a similar bill to the Senate floor in February 2009, and the $15,000 amount and terms of the bill were reduced by a Congress under political pressure to cap their stimulus spending. The Senator is to be commended for introducing this bill on two occasions, and for having the guts to stick to his guns.
Let's all hope this piece of legislation proves to be the catalyst for a turnaround in the housing market.