WASHINGTON — U.S. Senator Johnny Isakson, R-Ga., praised the Senate’s passage of legislation to stimulate the nation’s declining housing market. The legislation includes Isakson’s proposal to offer tax credits to individuals purchasing a foreclosed home or a home where foreclosure is pending. The legislation passed by a vote of 84 to 12.
“Our country and our economy face a serious challenge in the next 12 months. The number of unsold new homes and foreclosed resale homes will reach unprecedented numbers. Lenders will be forced to liquidate their real estate holdings, which will result in lower home values and less equity for homeowners,” Isakson said. “I am very pleased with this legislation. It targets the purchase of the very homes causing the economy its biggest problems. A $7,000 tax credit will inspire buyers to get back into the market to absorb this standing inventory of homes that are foreclosed or pending foreclosure.”
Specifically, the legislation includes Isakson’s proposal to provide a direct tax credit for the purchase of a single-family home in the amount of $7,000 over two years for purchases made within one year of the legislation’s enactment. Eligible properties include two categories of single family homes where a foreclosure filing has occurred pursuant to the laws of the state in which the residence is located:
• Homes that were occupied as a principal residence by the mortgagor for at least one year prior to foreclosure being filed (i.e., no investment properties).
• New construction properties that have never been occupied where permitting and construction began on or before Sept. 1, 2007. (These also must be foreclosed or pending foreclosure.)
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 believes the results were clear and swift as home values stabilized, housing inventory dropped and the market recovered.
“This tax credit worked to restore the housing market in 1975 and it will work again today,” Isakson said.
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.