As the final economic recovery legislation takes shape on Capitol Hill, the Worldwide ERC® Coalition is actively monitoring those elements directly impacting employee mobility. The U.S. Senate has included a greatly enhanced homebuyer credit in its version, which, if enacted, will provide a powerful incentive for potential buyers of transferee and inventory homes. Unlike the maximum $7,500 first-time homebuyer credit approved last year by Congress, the credit is 10% of the price of the home, up to a maximum credit of $15,000. In addition, it applies to any buyer of a principal residence within one year of enactment of the final bill (expected to occur in February). Other key differences within the newly proposed amendment is that the credit would not be phased out at any income level, nor would it have to be paid back later.
The homebuyer credit was introduced in an amendment by Senator Johnny Isakson (R-GA), and unanimously approved on February 4. Isakson, a former real estate brokerage owner and former Worldwide ERC® member, noted “It is time to fix housing first. 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. 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.”
If enacted, the amendment would allow taxpayers to claim the credit on their 2008 income tax return. Attempts to prevent misuse of the measure include a restriction to purchases of principal residences only, and means to recapture 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 enactment.
The Worldwide ERC® Coalition is actively monitoring developments within Congress as the stimulus legislation reaches a final vote, and will keep members informed of relevant changes and updates.