Housing Stimulus Bill a Big Win for Construction Industry
Article
Date: 07-31-2008
Source:
Associated Equipment Distributors
Copyright(C) 2008
Associated Equipment Distributors. All Rights Reserved.
Washington, D.C. - Yesterday,
President Bush signed the American Housing Rescue and Foreclosure Prevention Act
(H.R. 3221) into law. The Associated Equipment Distributors (AED), an association representing construction equipment
distributors, was an instrumental force in bringing a provision in the bill –
the home purchase tax credit, which provides first-time homebuyers with a tax
credit of up to $7,500 – to fruition.
AED first proposed the home purchase
tax credit in January, arguing that it would stimulate demand in the housing
market, help eliminate excess inventory, reverse declining home prices, and
restore consumer confidence. Other organizations quickly saw the merits of the
proposal and became important allies in the effort. Ultimately, AED helped build a broad-based coalition to support
enactment of the legislation.
"The home
purchase tax credit isn't a panacea for every woe plaguing the economy, but it
should help nudge buyers off the fence, eliminate excess inventory, and
ultimately get companies involved in home construction back on firmer financial
footing,” said AED President Toby Mack.
“Congratulations to our Washington team and all AED
members who have worked on this issue.”
The housing
downturn has had an impact on the construction industry. Ninety-three percent of
distributors who responded to AED’s 2008 Government
Affairs Survey said the housing downturn had an impact on their companies; close
to half said the impact was "major."
In June, AED Government Affairs Committee Chairman Dale Leppo,
Leppo Rents/Bobcat of Akron, testified at a House Small Business
Committee hearing along with representatives from the other major trade
associations involved in the home purchase tax credit campaign.
Under the new
law, first time homebuyers who purchase a home in the next year will receive a
tax credit of 10 percent of the cost the home (up to $7,500). Taxpayers who take
advantage of the credit will have to pay it back to the government in 15 annual
installments. The credit begins to phase out for a taxpayer with an adjusted
gross income in excess of $75,000 ($150,000 in the case of joint returns).
The bill also
includes other provisions aimed at preventing unnecessary foreclosures, making
housing more affordable, modernizing the Federal Housing Administration, and
enhancing disclosure by lenders to borrowers.