Northeast Mississippi’s congressional delegation -1st District Rep. Travis Childrs, D-Booneville, Sen. Roger Wicker, R-Tupelo, and Sen. Thad Cochran, R-Jackson/Oxford – found common ground this week in passage of an act extending tax breaks for new homebuyers for three months, a stimulus credited with lifting struggling home sales.
The act passed by ovewhelming margins in both chambers.
President Obama is expected to sign the bill today.
This is the offer: Buy a home before May 1 and collect up to $6,500 from the government. First-time homebuyers get up to $8,000.
First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the federal stimulus. The program was scheduled to expire at the end of November.
The votes this week expanded the program to homebuyers who are not first-timers, probably broadening its appeal and the benefits to the general economy.
Buyers who have owned their current homes at least five years would be eligible. First-time buyers – or those who haven’t owned homes in the last three years – could get up to $8,000. To qualify, buyers have to sign purchase agreements before May 1 and close before July 1.
Some limits apply. Principal homes can cost up to $800,000; vacation homes are ineligible. The credit would be phased out for individuals with incomes above $125,000 and for joint filers with incomes above $225,000. The home cost limit and the income limits are far above the average in both categories for Mississippians.
Real estate agents in the main say the first-time homebuyers’ tax credit that’s already in effect has boosted sales.
About 1.4 million first-time homebuyers had qualified for the credit through August. The Realtors estimate that 350,000 of those buyers would not have purchased their homes without the credit.
The real estate industry has lobbied hard for the expanded tax credit because it has been good for business, and it has helped hundreds of thousands responsibly realize the American dream of home ownership.
Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. The credit can be claimed on federal income tax returns.
Another break would allow money-losing companies to use current losses to offset taxable profits earned in the previous five years. That break is expected to cost $10.4 billion.
A tax break for multinational companies that pay foreign taxes was to have taken effect this year, but it would be delayed until 2018 to pay for the homebuyer breaks.
NEMS Daily Journal