Nation's Building News Online

Homeownership Tax Credit Off to Quick Start

One of NAHB’s top legislative priorities, a single-family homeownership tax credit, is off to a quick start in the 108th Congress.

And as promised by HUD Secretary Mel Martinez at last January's NAHB Board of Directors meeting in Las Vegas, it leads initiatives in the fiscal year 2004 budget process to increase the production of affordably priced housing and stimulate the economy. 

On Capitol Hill, the spotlight is now on S. 198, the “New Homestead Economic Act” and companion bill H.R. 839, “Renewing the Dream Tax Credit Act, ” both of which were introduced shortly before the new Congress convened."

Modeled after the successful Low Income Housing Tax Credit, the program would increase homeownership opportunities by providing investors with up to 50% of the cost of constructing a new home or rehabilitating an existing property. This would enable builders to provide affordably priced housing for urban and rural home buyers whose income does not exceed 80% of the area’s median income.
 

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Each year, the tax credit would produce some 50,000 new and rehabilitated homes, 120,000 jobs, $4 billion in wages and $2 billion in taxes and fees, more than offsetting the $2.4 billion that the Treasury Department estimates it would cost over five years.
 
NAHB is supporting both bills but believes the House version could be improved if a requirement to set aside 10% of the allocated tax credit for non-profit organizations were dropped.
 
NAHB is working with its coalition partners to include the legislation in the President’s tax package as well as any economic stimulus legislation moving through the Congress. To read the two bills click here and then search for S.198 and H.R. 839.
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