Biggert Pushes to Extend Homebuyer Tax Credit, Stabilize Housing Market
Washington, DC – October 8, 2009 – (RealEstateRama) — U.S. Representative Judy Biggert (R-IL-13th) today introduced two related measures aimed at promoting economic recovery by strengthening the housing sector, boosting homes sales, and stabilizing property values. Both bills are fully offset to remain budget neutral and would extend or amplify the popular first-time home buyer (FTHB) tax credit, which is set to expire at the end of November.
“As any homeowner will tell you, we have not yet recovered from the housing collapse that precipitated the current economic downturn,” said Biggert, a senior Member of the House Financial Services Committee and former real estate attorney. “Home values remain low, vacant properties continue to blemish neighborhoods, and jobs in every sector of the economy from construction to finance are at risk. The homebuyer tax credit has effectively helped to bring in new buyers and generate greater economic stability, but our recovery is fragile, and much more remains to be done.”
Biggert’s first bill would provide a six-month extension – until June 1, 2010 — of the existing FTHB tax credit for the lesser of $8,000 or 10 percent of a home’s value. The current credit, which was established as part of the stimulus package in February, is set to expire on December 1st, but because it requires about two months to close on a home purchase, new buyers entering the market now are already effectively excluded. A companion proposal has been introduced in the Senate by Benjamin L. Cardin (D-MD); however, Biggert’s bill also includes provisions that offset additional costs associated with the credit by reclaiming unspent portions of H.R.1, the economic stimulus.
Similarly offset, Biggert’s second bill would extend the credit for a full year, expand it to include additional homebuyers, and strengthen its impact in higher-cost housing markets like suburban Chicago. Similar to a companion measure offered in the Senate by Johnny Isakson (R-GA), the bill would raise the maximum amount of the credit to $15,000, extend it to include non-first time buyers, and eliminate restrictions that exclude individual buyers earning $75,000 or more annually and couples earning above $150,000. It also prevents abuse by speculators and flippers by limiting the credit to principal residences and recapturing the credit on any home sold within two years. Finally, Biggert’s legislation would fix a flaw in the existing credit, ensuring that members of the military who are transferred to a new location or deployed overseas are not required to pay back the credit on their home simply because they’ve been relocated.
“This is a highly effective stimulus measure that should not be allowed to lapse just as we are on the verge of recovery,” said Biggert. “But the economic benefits of the credit could be amplified significantly if we extend it beyond just first-time buyers and include growing families looking to trade-up. This expanded credit will ensure that higher-priced suburban communities all around the country are allowed to benefit, yielding stronger job growth and promoting economic stability nationwide. Further, our dedicated men and women in the military should never find themselves facing a tax penalty simply because they’ve been asked to serve in a new location.”
