In response to the rapid home price appreciation the country has been experiencing for most of the last four to five years, one U.S. Senator [1] has introduced legislation to help families and individuals who are looking to purchase their first home but are constrained by affordability issues.
Senator Ron Wyden (D-Oregon), Ranking Member of the Senate Finance Committee, has introduced a bill [2], the First-Time Homebuyer Tax Credit Act of 2016 to aid first-time homebuyers. Wyden’s proposal would give first-time homebuyers a refundable tax credit equal to 2.5 percent of the home’s purchase, with a maximum credit of up to $10,000. Borrowers would receive the full 2.5 percent credit as long as the home is less than $400,000, which is the average price of a home in Portland, the most populous city in Wyden’s home state.
“Our country’s housing policy needs a remodel,” said Wyden. “We have too many people working hard to support their families who can’t afford rent much less even think about buying their first home. The federal government needs to do more to repair the housing crisis at all levels, working closely with state and local governments. That includes making sure we are adequately funding effective programs to help people experiencing homelessness, getting low-income families access to quality housing, and making sure middle class Americans can afford rent or their first home.”
“Our country’s housing policy needs a remodel.”
Sen. Ron Wyden (D-Oregon)
Wyden’s proposal is aimed at helping middle-income Americans find solid footing, the credit would apply only to individuals with incomes below $80,000 per year and married couples with incomes of less than $160,000. Those who sell their homes within five years of purchase would have to repay a portion of the tax credit they receive, barring special circumstances such as job relocation or military deployment.
In addition to the First-Time Homebuyer Tax Credit Act, Wyden is in the process of finalizing a bill to be released in September that would help provide affordable rental properties for moderate-income families. This bill is modeled after the federal government’s existing Low-Income Housing Tax Credit (LIHTC) and will encourage housing developers to build more affordable rental properties through a new tax credit.
Click here [2] to view the First-Time Homebuyer Tax Credit Act of 2016.