Governor Sonny Perdue signed a watered down version of H.B. 261 into law today. The bill was originally passed as a $3600 state tax credit. The signed bill, and new law, allows for ANY home buyer to receive up to an $1,800 state credit over three years. The law applies to homes bought in a six month period starting June 1, 2009 through November 30, 2009.
Georgia’s revenues have been continually lower than projected and the state has been looking for ways to balance the budget. With that in mind, I am happy that the Governor did let this bill die. So, anyone closing on a home in the next six months will be potentially able to receive this credit. And, if you’re a first time homebuyer, you can add this to the $8,000 federal tax credit. But remember, both of these credits will expire in approximately six months.
“The housing tax credit is a strategic investment that strikes at the root of this economic downturn. Much of the financial turmoil we have seen stems from a severe downturn in housing,” Governor Perdue said. “Families interested in buying a home will now have an additional incentive to act.”
The bill provides an income tax credit for the purchase of a single family residence during the next six months. The amount of the credit will be the lesser of $1,800 or 1.2 percent of the purchase price. A taxpayer may claim one-third of the credit available in each taxable year, and may carry forward unclaimed amounts.
The credit created by HB 261 can be claimed one time per taxpayer and is completely independent of the federal first time homebuyer tax credit. The final version of the bill contains the GAR amendment to clarify condominiums and residences occupied at the time of sale are eligible for the credit. In addition, eligible single family residences include 1) new single family residences; 2) previously occupied residences that were for sale prior to the May 11, 2009 and are still for sale after May 11, 2009; 3) owner-occupied residences with respect to which the owner’s acquisition debt is in default on or before March 1, 2009; and 4) residences where a foreclosure has taken place and are owned by the mortgagor or the mortgagor’s agent.
For first time homebuyers, the state credit would be in addition to the federal tax credit authorized by the American Recovery and Reinvestment Act. The federal credit gives first-time homebuyers a credit equal to 10 percent of the purchase price, up to $8,000. The state credit is available to all buyers.
“I’m proud of Governor Perdue for signing this legislation, and I’m proud to have brought it before the state legislature. This bill will put people to work, reduce the inventory of unsold homes, and kick start Georgia’s economy,” said Rep Ron Stephens. “Jumpstarting the housing industry will mean more money flowing through our economy and more customers for Georgia’s real estate professionals, appraisers, closing attorneys, and others who depend so heavily on regular market activity. This bill is a signal that we are doing all we can to spur Georgia’s economy and lead the nation in financial recovery,” said Rep. Larry O’Neal.
Click here to read more about the bills Governor Perdue signed today.