WASHINGTON, D.C. — U.S. Sen. Johnny Isakson (R-Ga.) introduced an amendment Wednesday to the fiscal year 2009 supplemental appropriations bill that seeks to stimulate the nation’s declining housing market by expanding the current $8,000 homebuyer tax credit to include all individuals who purchase a home in the next year.
Specifically, Isakson’s amendment would expand the current $8,000 homebuyer tax credit so that it applies to any buyer of any home, not just first-time buyers. The amendment also would eliminate the income caps of $75,000 for an individual and $150,000 for a couple under the current tax credit so that there is no income limit for eligibility. Finally, the amendment would extend the tax credit to June 10, 2010, and would still allow homebuyers to claim the credit on their 2008 tax return.
“By removing the income and first-time buyer restrictions from the current homebuyer tax credit, I am confident many more buyers will take advantage of this tax credit and we will have a significant improvement in the housing market and in our economy,” Isakson said. “As has happened in 1968, 1974 and 1990-1991, housing took America into a recession and it was only when the housing market recovered that the America economy improved.”
Isakson has pushed hard for a non-repayable tax credit for homebuyers because he knows that 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.
On Feb. 4, 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 only 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 spent more than three decades in the real estate business, beginning his business career in 1967 when he opened the first Cobb County office of a small, family-owned real estate business, Northside Realty. Isakson later served as president of Northside for 20 years, presiding over the company’s growth into the largest independent residential real estate brokerage company in the Southeast and one of the largest in America.