On April 30th, 2010 the federal tax credit expired but it looks like the New Jersey legislature has something in the works to try to ”jump-start the state housing market” Couple this with the unbelievably low mortgage interest rates and this could be good news for the Montclair, Glen Ridge and Bloomfield homebuyer.
Athena Merrit of the Philadelphia Business Journal reports:
The measure(Assembly Bill 1678) would establish the New Jersey Homebuyer Tax Credit Program, which would allow refundable tax credits of up to $15,000 or 5 percent, whichever is less, for the homebuyer of new and previously owned homes during calendar year 2010. A qualifying homebuyer would be able to take the credit against the gross income tax. The total credits available under the program would be $100 million, with $75 million allocated for purchases of newly constructed houses and $25 million for previously occupied home.
The bill, sponsored by Assemblymen Lou Greenwald, D-Camden; Vincent Prieto, D-Hudson; and Albert Coutinho, D-Essex; was released by the Assembly Appropriations Committee on a 11-0 vote and one abstention.
“This is a creative and sensible way to revitalize our housing market and our economy,” Prieto said. “Much direct and indirect economic activity is generated through new home construction and home re-sales, so this is the smart thing to do in this tough economy.”
While The New Jersey Association of Realtors is working to have more money dedicated to the purchase of existing homes, the main focus of the bill is to put people in the building trades to work and stimulate the economy through income and sales tax revenue created by the new construction
The proposed tax credit would be spread over three years and would be determined on a first-come, first-served basis until the total amount is exhausted. An unknown number of buyers won’t get the credit once the program’s maximum amounts have been reached, according to the state Office of Legislative Services. The state Division of Taxation, in its analysis, estimated that the bill would reduce gross income tax revenue deposited into the property tax relief fund by equal annual amounts of $33.3 million in fiscal years 2011, 2012 and 2013.
Before this legislation can become law, it must be approved by the full state Senate and be signed by Governor Chris Christie. The full Senate may vote on the bill as early as its next scheduled meeting on June 10, 2010. There is no way to know at this point whether Governor Christie is inclined to support the legislation.
We would like to hear your thoughts as to whether this a good idea. Search for homes for sale in the new jersey suburbs here.
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This has been sitting on Governor Christie’s desk now for more than a month. If he allows it to lapse 45 days without signing it becomes law automatically. I think he is going to let go into effect but doesn’t want to attach his name to it because it obviously flies in the face of the platform he campaigned on.