- $15,000 tax credit bill targets low- and middle- income earners
- Potential buyers cannot have owned or purchased house within past three years
Bill Introduces First-Time Homebuyer $15,000 Tax Credit
US Rep, Earl Blumenauer and Rep. Jimmy Panetta introduced new legislation to provide a tax credit of either $15,000 or up to 10% of a home purchase price targeted explicitly for first-time homeowners.
This proposed legislation is a direct result of a campaign promise made by President Joe Biden.
To be eligible for the full credit of this proposed legislation, potential buyers must be 18 years old and must not have owned or purchased a home within the last three years. They also must earn no more than 160% of the area’s median income. In other words, low- to middle-income earners are the targeted participants for this proposed “First-Time Homebuyer Act.”
The home’s purchase price itself must be no more than 110% of the area’s median purchase price. Potential borrowers would be able to claim this first-time homebuyer’s credit for primary housing units purchased after December 31, 2020.
Potential buyers would need to live in the home as a primary residence for a minimum of four years. In the event that something prevents potential buyers from using the home for no less than four years, the borrowers would be required to pay taxes to recover a portion of credit.
Past History of First-Time Homebuyer Tax Credit
During the Great Recession, a first-time homebuyer tax credit was woven into the 2008 Housing and Economic Recovery Act.
That 2008 legislation created a $7,500 tax credit for first-time homebuyers. In 2009, that tax credit was increased to $8,000. A total of 1.5M homebuyers participated in that program.
Proposed Legislation Is Step One in Legislative Process
This newly introduced, proposed “First-Time Homebuyer Tax Credit” Act is just the first step in any negotiated legislative process.
We’ll check in with you once negotiations proceed about this first-time homebuyer tax credit proposal and/or any other first-time homebuyer assistance proposal. Why? Because you as real estate agents know better than most that any negotiation process requires compromise, patience, good faith and time.
Thanks to HousingWire.
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