Governor Perdue signed HB 261 yesterday creating a Georgia income tax credit up for the purchase of an eligible single-family residence.
Although the bill was signed in May, the credit is limited to eligible purchases made between June 1, 2009 and November 30, 2009.
The credit created by HB 261 can be claimed one time per taxpayer and is completely independent of the federal first time homebuyer tax credit.? The final version of the bill contains the GAR (Georgia Association of Realtors) amendment to clarify condominiums and residences occupied at the time of sale are eligible for the credit.
In addition, eligible single family residences include
- new single family residences;
- previously occupied residences that were for sale prior to the May 11, 2009 and are still for sale after May 11, 2009;
- owner-occupied residences with respect to which the owner’s acquisition debt is in default on or before March 1, 2009; and
- residences where a foreclosure has taken place and are owned by the mortgagor or the mortgagor’s agent.
While there was little debate about the need to stimulate the housing market, state budget deficits left final approval of HB 261 in doubt. Understanding the delicate nature of passing a tax credit bill in our current budgetary climate, House sponsor Ron Stephens and House Ways and Means Chairman Larry O’Neal met with the Governor late in the session and decided to reduce the overall maximum benefit of the tax credit to $1,800 or 1.2 % of the purchase price (whichever is less) spread over three years. By doing so, the overall impact to the state was reduced by allowing the credit to be claimed over three budget years, while continuing to provide a significant benefit to potential homebuyers.
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