Governor Sonny Perdue recently signed House Bill 261, which provides a $1,800 tax credit for home purchases. The credit, which would be taken over three years, takes effect immediately and is meant to spur activity in the housing market.
The signing and passing of this bill is yet another needed boost to the struggling real estate market in Georgia and will continue to gain positive moves towards a market rebound which is currently in process.
“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.
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 for six months.
“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.
This bill is a significant positive gesture to help spur financial recovery but more can be done. I’d like to see Georgia’s utility companies partner up with realtors throughout the state to grant gratuitous electricity, gas and water services to vacant homes that are active on the sales market. Otherwise, sellers should maintain responsibility for these services until after closing. This would greatly improve efficiency in the due diligence process on the part of buyers.