Governor Purdue Signs Georgia Housing Tax Credit Bill!
May 16, 2009 by Greg Saunders
Greetings Peachtree City! Well it finally happened! Governor Sonny Purdue signed into law the highly debated House Bill 261 on May 11, 2009. How much controversy was behind this bill? Well, as far as the Georgia Association of Realtors were concerned, it was at the top of their 2009 agenda.
From the side of the opposition however, this bill seemed unnecessary because it was felt that the credit would not pose to be a huge incentive for folks that were preparing to buy anyway. Critics also stated that Georgia is facing a $3.1 billion deficit in fiscal year 2010 and projected deficits projected at $746 million in 2001 and $1.7 billion in 2012.
Just for the record, I personally think that Governor Purdue should be commended for taking a stand to assist Georgians with another stimulus to combat our housing crisis. The impact of home foreclosures has devastated our communities not to mention the psychological and economic impact that has results from families losing their homes through foreclosure.
HB 261 gives new homeowners a one-time tax credit of 1.2% of the purchase price or $1,800, whichever is less. To be eligible you must purchase your new single family residence between June 1, 2009 and November 30, 2009. The tax credit is applied over three years, with one-third of the credit available each year. If a the amount of the credit exceeds the taxpayer’s tax liability, then the unused credit may be carried forward to the next tax year.
Based on projections according to GBPI analysis, the credit will result in between 900 and 1,100 additional homes sold at a cost to the state of $164.5 million. Now as I mentioned earlier, pundits will protest the fact that the credit is sending hundreds of millions of dollars to Georgians that were already going to purchase a home. However, the way I look at it is that this gives a bigger nudge to those folks still sitting on the fence and a chance to reduce the huge inventory of homes on the market. Further, through home ownership we have also created additional new property tax revenues.
For Realtors and the mortgage financing community an additional 900 to 1100 homes or a 1.2% increase will be sold this year. This number is based on the estimated calculation of 90,500 homes sales x .012 = 1100 homes.
So hey neighbor….you’ve got the federal first time home-buyers credit ($8,000), the new Georgia State Income Tax Credit ($1,800), combined with home prices and interest rates at historic all-time low. So, if you have been playing hide & seek waiting for a better time to buy….The time is now!! Get off the fence, pick up the phone and call an agent and a mortgage professional now!
If you don’t have one…I hope that you’d give me a call! I’d be privileged to assist you with all your professional real estate needs!
Greg Saunders
It’s too bad the credit is only good from June to November??? I bought a new home in April, and I guess my family is out of luck on this credit???
Hey Paul:
Thanks for your comment. I hope you at least took advantage of the $8,000 tax credit good from January 1, 2009 through November 30, 2009.
Has there been any word on if this is going to be extended as is the federal tax credit?
The United States Senate is giving serious consideration to extend the federal firt time homeowners tax credit. Georgia Republican Senator Johnny Isakson has been central in moving this legislation forward.
In addition to providing a $8,000 tax credit to first-time home buyers, the measure also provides homeowners a $6,500 credit for buying a new home between December 1, 2009 and April 30, 2010. Homebuyers with contracts as of April 30, 2010 would still qualify as long as the transaction is completed within 60 days. Individual homebuyers with incomes up to $125,000 and couples with incomes up to $225,000 would be eligible. If the house costs more than $800,000, the homebuyer would not be eligible for the credit.