Rep. Ron Paul, R-Tex., who is usually opposed to government intervention in the economy, has introduced legislation to permanently extend the first-time homebuyer tax credit and to make the credit available to people whose homes have been destroyed by a natural disaster, such as a hurricane.
“It is hard to think of a more beneficial or compassionate expansion of the first-time homebuyer tax credit than to make the credit available to those whose homes have been destroyed or damaged by natural disasters,” Paul says.
“In addition, the changes to the casualty loss provision will help more taxpayers affected by natural disasters," he says. "Providing tax relief to first-time homebuyers and to those affected by natural disasters should be one of Congress’ top priorities.”
The legislation also makes a number of changes to existing tax credits in order to enhance their usefulness to victims of natural disasters, according to a news release from Paul’s office.
Specifically, this bill makes casualty loss deductions available to taxpayers who don't itemize, and makes it available to them for five years after the disaster.
If passed, the proposed legislation would also help people who have lost their jobs because of a natural disaster by making unemployment payments provided under the Disaster Relief and Emergency Assistance Act tax-free.
Pending sales of previously owned U.S. homes rose more than expected in April, scaling a six-month high as prospective home owners took advantage of a popular homebuyer tax credit, a survey showed on Wednesday, Reuters reported.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in April, increased 6.0 percent to 110.9, the highest since October.
It was the third straight month of gains in the index, which leads existing home sales by a month or two. Pending home sales rose by a revised 7.1 percent in March, a figure previously reported as a 5.3 percent increase.
Analysts polled by Reuters had forecast pending home sales rising 5.0 percent in April.
Pending home sales were boosted by a government tax credit for home buyers. Prospective buyers had to sign contracts by the end of April and close by the end of June to be eligible for a federal tax credit.
Pending home sales are measured at the time of contract signing. Existing home sales, which are counted at contract closing, are likely to increase until next month.
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