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NAR: Homebuyer tax credit will aid housing recovery

WASHINGTON – June 9, 2008 – The National Association of Realtors® testified Thursday that a temporary tax credit would be the best incentive to move hesitant homebuyers into the market. NAR based its support on the success of a 1975 temporary tax credit designed to “clear an over-supply of newly constructed homes during an economic downturn.”

“We urge Congress to move quickly to conference and final passage of this tax incentive,” says Jim Helsel, NAR treasurer. “Failure to act quickly could further stall the housing market, hurting many of our members, who are predominantly small business owners and self-employed individuals.”

Testifying for NAR before the House Committee on Small Business, Helsel noted “three critical features for an optimal home buyer tax credit.” The credit should apply to all residential real estate, not solely foreclosed properties; it should be temporary and only apply for a short period of time; and it should provide higher income limits than those the House has imposed, particularly for single individuals.

“If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but also it could expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel says.

NAR also discussed the importance of updating the “passive loss” rules that were enacted in 1986 to bring small investors back to real estate. The passive loss rules were not indexed for inflation, making the tax incentive irrelevant in most cases.

© 2008 FLORIDA ASSOCIATION OF REALTORS®
  Related Topics: Taxes
Questions, comments or suggestions on this article? Have a news tip? Send a letter to the editor to: Newseditor@floridarealtors.org.