Of DOW JONES NEWSWIRES – 06/12/2009
WASHINGTON (Dow Jones)–A tax credit currently limited to certain first-time home buyers would expand dramatically under legislation introduced by U.S. Sen. Johnny Isakson, R-Ga.
Under the legislation, any buyer of a home – not just first-time home buyers – would be eligible for a tax credit worth 10% of the purchase price up to $15,000.
A tax credit passed into law earlier this year is worth only $8,000 and is limited to individuals and couples making no more than $75,000 and $150,000 respectively.
The legislation, which Isakson introduced Wednesday, quickly attracted co-sponsors from both parties, including Senate Banking Committee Chairman Christopher Dodd, D-Conn.
A beefed-up tax credit has strong backing from business and industry groups. The Business Roundtable earlier this week launched a campaign recommending the key changes to the credit that are proposed in the legislation. The National Association of Home Builders and the National Association of Realtors have also pushed for an expanded tax credit.
Still, the measure faces an uphill climb in Congress because of its price tag, which is likely to be high. Lawmakers would also have to justify assisting high earners purchase a home.
“One of the biggest problems facing the American people today is an illiquid housing market, a decline in their equity, a decline in their net worth and a depression in the housing market that we are obligated to correct if we possibly can,” Isakson said in a press release.
The legislation would extend the tax credit, which expires Dec. 1, by one year from the date of enactment. Home buyers would be able to claim the credit on their 2009 tax return for purchases made in 2010.