NAR: Homebuyer Tax Credit Will Aid Recovery
The National Assn. of REALTORS® testified recently that a temporary tax credit would be the best incentive to move hesitant home buyers 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,” said Jim Helsel, NAR treasurer and a partner in RSR REALTORS® in Lemoyne, Penn. “Failure to act quickly could further stall the housing market, hurting many of our members, who are predominantly small businesses 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 said.
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.
The National Assn. of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
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