More States Looking at Buyer Tax Credits

In an effort to get stalled housing markets going again in their respective jurisdictions, a number of states are following California's lead in adopting tax credits for homebuyers. According to the National Association of Home Builders' Sales and Marketing and Council, plus other sources, legislation awaiting the governor's signature in Utah offers a $6,000 grant to be used by buyers for downpayments. The Kentucky House has cleared a $5,000 tax credit for new home purchasers. A similar measure has cleared the Virginia Senate and has been introduced in the Illinois House. In Georgia, a $3,600 tax credit spread over three years for new homebuyers has passed the lower chamber. These are all in addition to the $8,000 federal tax credit adopted by Congress in February. Also, North Carolina and South Carolina are said to be looking at replicating California's program, which gives Golden State taxpayers who buy a new home a credit of 5% of the purchase price, up to a maximum of $10,000 to be paid out over a three-year period. If adopted, the combined federal-state benefit would be as much as $18,000. In Missouri, meanwhile, the state housing finance agency is advancing buyers the federal tax credit in the form of a short-term loan. Delaware has a similar program, and Pennsylvania, New Mexico and several other states are considering such programs. Builder associations in Indiana, Kentucky, Michigan, New York, Oregon, Tennessee, Texas, Washington are said to be pursuing Missouri's model, which, in effect, "monetizes" the credit so buyers can use it for cash needed to close on their mortgages instead of waiting until they file their tax returns.