Democratic lawmakers today introduced new laws to help first-time buyers deal with rising home prices with a tax credit of up to $ 15,000 as part of President Joe Biden’s bold housing agenda.
With the First Time Homebuyer Act headed by US Rep. Earl Blumenauer (D-OR) and Rep. Jimmy Panetta (D-CA) will create a refundable tax credit of up to 10% of the purchase price or $ 15,000. Taxpayers can treat their home purchases as if they were made in the previous tax year in order to get the credit sooner.
As property prices and demand continue to rise to unprecedented levels, Barriers to home ownership Low- and middle-income Americans are also growing. The tax break aims to tackle the country’s affordability crisis by creating incentives for first-time buyers, especially buyers among historically marginalized communities.
“The goal of home ownership is out of reach for too many families as property prices rise on the Central Coast and across California, even in this pandemic. The home ownership gap particularly affects families with skin color, who for too long have been disproportionately withheld from building wealth through home ownership. Families need help buying their first home so they can fully realize the American dream, ”said Congressman Panetta.
To be eligible for the full loan, borrowers must not have owned or bought a home in the past three years. They must also meet income limits of 160% or less of their area median income and buy a home at or below 110% of the average purchase price in their area.
Sunny Shaw, president of the National Association of Housing and Redevelopment Officials, believes the tax break will empower home ownership and solve the affordability problem. Rob Dietz, chief economist at the National Association of Home Builders (NAHB), ponders The surrounding context and details will be the key to success..
“It is certainly a positive step, especially for frustrated first-time buyers who are looking for an additional financial boost to try to acquire home ownership,” Dietz told MPA in an interview. “Right now, however, the challenge in the marketplace is on the supply side. Even if you are driving demand, you will have to solve some of the supply-side challenges that are constraining inventory as the risk is that you would increase demand, keep driving house prices as demand increased, and do so without a corresponding response from supply at that moment some of the benefits that would come from the tax credit were offset. “