WASHINGTON, D.C. – Jun 9, 2008 – (RealEstateRama) — The National Association of Home Builders (NAHB) today called on Congress to create a temporary home buyer tax credit along with other important tax measures to boost the faltering housing market and economy.“House prices and inventories obviously are central to the outlook for the economy and the financial markets,” Joe Robson, first vice president of NAHB and a home builder from Tulsa, Okla., told members of the House Small Business Committee. “Policies that stimulate home purchases in the immediate future can pay huge dividends and a temporary home buyer tax credit provides the most bang for the buck.”
Robson added that the recent revival of interest among prospective buyers suggests that temporary credits could stimulate a wave of home buying that could quickly reduce excess supply in housing markets and halt the dangerous erosion of house prices and mortgage credit quality.
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008, contains a provision that would provide a temporary, first-time home buyer tax credit of $7,500 for the purchase of any home used as a principal residence and closed on between April 9, 2008 and April 1, 2009.
“NAHB believes that the homebuyer credit model in H.R. 3221 would help address many elements of the current housing crisis,” said Robson. “The tax credit would increase home sales, which would cause inventories to fall and stabilize home prices and mortgage markets. NAHB would urge Congress to consider options for increasing the size of the credit to maximize its impact and effectiveness.”
In crafting a final housing bill, Robson also urged lawmakers to incorporate the following tax provisions to achieve a comprehensive solution to the housing crisis:
Expansion of the mortgage revenue bond program. Expanding the cap for mortgage revenue bonds by an additional $10 billion, as well as modifying the rules so that state housing finance agencies may use the proceeds of the bonds to refinance troubled mortgages, would reduce the number of foreclosures, help home owners stay in their homes and protect local property prices.
Modernization of the Low Income Housing Tax Credit (LIHTC). Modifying this program is essential to expanding the supply of much-needed affordable renting housing and would stimulate local economies through jobs, taxes and wages and salaries paid.
Expansion of the net operating loss deduction carryback. Allowing businesses, particularly highly cyclical companies in the building industry, to accelerate taking their tax losses will help them weather the economic storm and keep their existing employees on the payroll.