Isakson Seeks to Add Homebuyer Tax Credit to Budget

Originally Published Apr 1, 2009, 9:00am (Updated Apr 1, 2009, 9:00am)

U.S. Senator Johnny Isakson, R-Ga., introduced an amendment to the Fiscal Year 2010 Budget Resolution on Tuesday that seeks to stimulate the nation’s declining housing market by providing for a $15,000 tax credit to individuals who purchase a home in the next year.
“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. “Our economic crisis started with housing, and our economy will continue to suffer unless we do something now to immediately fix the housing problem. We must create targeted incentives that will encourage Americans to buy homes again.”

Isakson’s amendment to the Budget Resolution would create a deficit-neutral reserve fund for providing a non-refundable federal income tax credit for the purchase of a principal residence during a one-year period. It would also ensure that there is room available in the Fiscal Year 2010 budget levels for a homebuyer credit to be passed at a later date. Isakson plans to introduce his $15,000 tax credit as a stand-alone bill in the next few weeks.

On Feb. 4, 2009, the Senate unanimously approved an amendment by Isakson to the economic stimulus bill would have provided a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. During conference negotiations between the House and Senate on the final version of the bill, Isakson’s $15,000 tax credit for all purchasers of any home was removed. Instead, House and Senate negotiators made small modifications to the first-time homebuyer tax credit that was enacted in 2008 as part of the Housing and Economic Recovery Act of 2008.

Isakson has pushed hard for a non-repayable tax credit for homebuyers because he says he knows it will work. 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, who was in the real estate industry in Atlanta at the time, says the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.

Last year, Isakson introduced legislation to specifically target those homes that were causing the unprecedented increase in housing inventory by offering tax credits to individuals purchasing a foreclosed home or a home where foreclosure is pending. In April 2008, the Senate passed legislation to stimulate the nation’s declining housing market that included Isakson’s proposal. However, the final version of the legislation that was signed into law included only a $7,500 tax credit for first-time homebuyers that must be repaid over a 15-year period. Isakson’s amendment that passed Tuesday would sunset that $7,500 tax credit.

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2 comment(s) on this page. Add your own comment below.

Jim Callihan
Apr 1, 2009 2:00pm [ 1 ]

So...you really want to "fix the economy"? Too late - that already happened in 1913. Educate yourself first and then, maybe then (but I question the fortitude of most any incumbent...especially, the senate) you can "un-fix" it.

Any economy must first be built upon honest money, not illegal debt: http://publiccentralbank.com

Read it. Learn it. Share it. Supporting HR 1207 is a great start Johnny. Why don't you & "Clarence" get with Nathan Deal who helped sponsor this bill?

And to that - THANKS NATHAN!!! Georgia has at least one conservative left in office! NATHAN DEAL FOR SENATE 2010!!!

Only the truth will set you free.

Linda Mock
Apr 1, 2009 7:56pm [ 2 ]

Hooray for Johnny Isakson who truly does understand and continuously attempts to get our Housings Industry back on track! His comment: “Our economic crisis started with housing, and our economy will continue to suffer unless we do something now to immediately fix the housing problem. We must create targeted incentives that will encourage Americans to buy homes again.”…. Couldn’t be closer to the truth.

Regardless of the ratings for the new President and the thoughtless and wasteful spending called Stimulus, Americans are now frozen in fear. And with good reason.

Ponder if you will, all the industry that is affected by the downturn in Housing. Look at the current unemployment rates, which do not include struggling small business owners. Think of all the business doors that have been shut down and the vacant shops that now line our streets.

Homeowners pay property taxes that generate revenue for our communities. Aren’t you weary of reading headlines about layoffs, furloughs, and closings? Wouldn’t it be wonderful to read about Grande Openings and Hiring’s?

Isn’t it time we focus on the individual American, the backbone of America vs. Big Ceo’s and Big Bonus checks for those who failed as leaders?

Think of it, this proposal for Housing is actually one of the only idea’s that truly puts money in the pockets of Americans, now that indeed is a true stimulus idea.

Please continue to support and applaud both Johnny Isakson and Nathan Deal who work steadfast to jumpstart our economy.

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