By now, you’re no doubt aware of the $8,000 first-time home buyer tax credit that was included in the landmark economic stimulus legislation enacted by Congress and signed into law in mid-February.
While we were disappointed that the tax credit wasn’t larger and wasn’t extended to all buyers, we were pleased that—unlike the 2008 tax credit—it is a real credit and doesn’t have to be repaid.
Considering that about 40 percent of all home purchasers each year are first-time home buyers, the tax credit has the potential to trigger considerable activity in the housing market. In fact, the NAHB’s housing economists estimate that it could generate an additional 160,000 home sales. To this end, the NAHB is doing a great deal to promote use of the tax credit to generate business for members—both directly and indirectly—and to help get the housing market and the economy back on track.
One of our most important efforts is www.federalhousingtaxcredit.com. This comprehensive Web site provides basic information about the tax credit and has a detailed question and answer section. It also includes a video interview with Rob Dietz, the NAHB’s director of tax issues, who explains how the credit works.
This Web site is a great resource for prospective buyers and can also help trade-up buyers understand how to best market their homes. In addition to providing information about the tax credit, it summarizes other measures in the legislation that affect small businesses, including an extension of the net operating loss carryback period from two years to five years for businesses with average gross receipts of no more than $15 million over the previous three years.
Federalhousingtaxcredit.com tallied a record 844,000 visits in February, a strong indication that prospective buyers are seriously considering the tax credit and that it has the potential to generate home sales and help revitalize the housing market.
At www.nahb.org/taxcreditmaterials, we have assembled a comprehensive package of materials that members and HBAs can use to promote the tax credit. One of the most popular is a four-page brochure, “Opportunity Knocks for Home Buyers,” which is newly revised to reflect the tax credit provisions in the economic stimulus bill. The publication also includes examples of typical federal income tax savings during the first five years of homeownership and a general discussion of the benefits of owning a home. Many associations and individual members have reprinted this publication for use in their sales offices and at events such as home shows.
The other materials available for promoting use of the tax credit include print ads that builders can customize to promote their own communities, a consumer flyer, Web banners, and background information including a Q&A and a fact sheet.
Among the resources for HBAs are a print ad for use in member newsletters, a video public service announcement, talking points on the tax credit, and radio spot scripts on the credit.
I hope you and your HBAs will use these resources to help promote home buying and use of the tax credit. It’s a tool that has the potential to stimulate sales and help breathe some life back into the housing market, but only if buyers use it.