I was in the real estate business in Atlanta at that time, and I saw the positive effects of the 1975 tax credit firsthand. The day before the homebuyer tax credit passed, the phones at my real estate office were dead. The day after it passed, the phone was ringing off the hook with buyers and I had to hire more people to keep up with all the calls. The results in Atlanta and across the nation were clear and swift as buyers came back into the market, home values stabilized, housing inventory dropped and the market recovered.
I’m certain we would have the same positive results if we passed a similar tax credit today. Right now, some buyers are able to take advantage of an $8,000 tax credit. However, this tax credit is limited to first-time buyers and has income restrictions. It also will expire on Dec. 1.
The current first-time homebuyer tax credit has helped slightly stabilize the market. However, the real housing recession is not with first-time home buyers -- it is with the “trade-in” or “move-up” buyers. They’re still putting off buying that next home.
Our current economic downturn began in housing and it will only end by bringing buyers back to the housing market.
That’s why I have proposed expanding the current tax credit to any buyer who purchases any type of home as their principal residence. My legislation, S1230, would increase the maximum credit to $15,000, eliminate income restrictions and extend the expiration date until one year after enactment. I am confident this legislation will swiftly help our economy get back on track.
Yes, we have a pervasive housing problem, but we also have a historical precedent that works.
Johnny Isakson represents Georgia in the U.S. Senate.