Revised Housing Tax Credit Stimulus Bill (H.B. 261) Passes Georgia House; Senate Now Considering

Georgia CapitolBack on Febrary 22, 2009, I posted my concerns regarding H.B. 261.  While good intentioned, that bill had the potential to cause more harm than good.  I applaud the Georgia Assembly for taking matters into their own hands and considering and creating a bill that will get the Georgia housing market back on track.

H.B. 261 went through some revisions and passed the House yesterday 162-4.  I believe the changes in the bill make it a much more effective stimulus tool and could re-start the stalled Georgia housing market.

The key features of the bill, as I understand them are outlined as follows:

  • Applies to new or previously occupied single family homes
  • Can be used by owner occupied or investment related properties
  • Tax credit will be in effect for 6 months and apply to homes closed on in that period
  • Credit shall equal 1.2% of the purchase price but not to exceed $3,600
  • Credit shall not exceed $1,200 per calendar with any balance being applied to the following year’s tax liability for a maximum of two additional years
  • If tax liability is less than the credit, the balance will be forfeit

What Does This All Mean?

First of all, this tax credit is good for ALL  buyers not just first-time home buyers as is the case with the federal goverment’s $8000 Tax Credit.  Also, this tax credit is a direct reduction of taxes owed which is like the federal credit.  If you are a first time buyer, you can qualify for both of these credits resulting in a maximum of $11,600 in tax credits.  That’s a nice chunk of change even if you have to wait three years to get it all.

Since this credit is not limited to owner occupied homes, investors can take advantage of the tax credit and help reduce our excess inventory.  If you combine already discounted prices with historically low interest rates and this tax credit, now becomes a very compelling time to buy a home or rental property.

One of my major problems with the first draft of this bill was that it limited the purchase price of the home to $40,000 to $300,000.  Now, that restriction is gone which will help all homeowners as well as buyers.

Overall, I give a lot of credit to the sponsors of this bill: State Rep. Ron Stephens,164th, State Rep. Tom Dickson, 6th, State Rep. Cecily Hill, 180th, State Rep.Terry Barnard, 166th, State Rep.Jay Neal, 1st, and  State Rep. Butch Parrish, 156th.

I encourage you to read the bill for yourself here. It’s only 1.5 pages!

As always, things can change.  The bill is before the Senate and may get altered.  Hopefully, it will be passed and signed into law quickly by Governor Perdue.  If things change, I’ll be there to let you know what happens.

Write your representatives and urge them to pass this bill.  You can find your legislator here.

Related Posts:

First Time Home Buyers To Get $8000 Tax Credit On 2009 Home Purchase

Georgia House Considering It’s Own Housing Tax Credit Stimulus – H.B. 261

General Information for Buyers