A proposal to raise the tax credit for home buyers to $15,000 would have a significant impact on the economy according to a local Realtors group.
Congressman Dan Burton, R-5th District, is a co-sponsor of a resolution to increase the tax credit for home buyers from $8,000 to $15,000 and would eliminate the provision that the credit would only be for first-time home buyers.
“The housing industry is in a depression right now, and we need more than just the $8,000 credit for first-time home buyers,” Burton said.
The proposed Homebuyer Tax Credit would be for $15,000, or 10 percent of the purchase price, whichever is the least amount. Purchasers would have one year from the enactment of the legislation to purchase a house and would not have to repay the credit.
If adopted by Congress, the current $8,000 tax credit for first-time home buyers would come to an end.
Kathy Harbaugh, executive director of the Realtors Association of Central Indiana, said the higher tax credits would be a huge advantage to someone interested in purchasing a home.
“Studies have found that every time a real estate transaction closes, it puts 51 people to work,” she said.
Harbaugh said the $15,000 tax credit would have offer a major boost to the recovery of the housing industry.
“We were disappointed the higher tax credit didn’t make it through,” she said. “People can take that tax credit and use it to purchase appliances, furniture or a car.”
Harbaugh said the tax credit will make a big difference in the economy. She said realtors would like to see the $15,000 tax credit made retroactive to last year.
The local real estate sales market has been flat in the region, she said.
Harbaugh said the tax credit could raise the price of homes on the market.
“The signs for a recovery are in place,” she said of the local housing market. “There are a lot of lookers and we’re seeing increased traffic.”
Buyers shouldn’t put their plans to buy on hold waiting on the additional tax credit, Harbaugh said. She cautioned that interest rates might increase.
Burton’s spokesman, John Donnelly, said the resolution has bipartisan support. He said the $15,000 figure was included in the stimulus package bill approved earlier by the Senate but was reduced in conference committee.
The National Association of Home Builders has estimated the $15,000 credit would result in the sale of 500,000 homes and create 255,000 jobs.
Ken de la Bastide can be reached at (765) 454 -8580 or via e-mail at ken.delabastide@kokomotribune.com
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