Brevard County Representative Proposes Down Payment Assistance Tax Relief
Florida Today reports that U.S. Rep. Dave Weldon asked representatives of the local real estate industry to support proposed legislation that would give a tax break on cash gifts used for a down payment on a homes.
The intent of Weldon’s legislation - the Homeownership Affordability Act of 2007 - is to help people swing a deal for a home.
The median selling price of a home in Brevard County rose from $99,400 in 2001 to $219,400 in 2006, an increase of more than 120 percent, according to the Florida Association of Realtors.
The median price was $201,100 in February.
Weldon’s bill would allow a family member to provide another family member up to 20 percent of the price of a house or condo, for a down payment, without facing a tax consequence that gift - a potential boon to a Florida mortgage applicant.
Under his proposal, the home value could not exceed 110 percent of the FHA’s median-priced home for each metropolitan statistical area.
Currently, when a person gives more than $12,000 to another person in any given year, the giver must fill out a federal tax form outlining the tax gift.
Weldon, a Republican, said his the legislation, which he will introduce in the House of Representatives when he returns to Washington, is “not a cure-all.”
But it could provide critical help to the young professional looking to enter the Florida housing market for the first time.
Weldon spoke to about 75 people - mostly Realtors, but also some Florida mortgage lenders, during a luncheon symposium at the headquarters of the Melbourne Area Association of Realtors.
“If we can get Realtors all across the country embracing this,” Weldon said, “then we have a better likelihood of seeing it enacted into law.”
Home affordability emerged as a hot topic in Brevard and other Florida counties, as a spike in home prices from 2003-2006 left many potential buyers without any way to purchase property.
Also added to the mix of monthly Florida home mortgage bills are increased tax liabilities - based on higher property values - and rising property insurance costs.
The problem, Weldon and others noted, is that the costs are keeping many people - especially middle-class first-time home buyers such as teachers, law enforcement agents and medical personnel - from buying a home.
That encourages those individuals to look elsewhere because the pool of workforce housing for sale has shrunk so considerably, Weldon said.
“Middle-income families shouldn’t expect to be able to live anywhere. But they would like to be able to have abundant choices,” Weldon said. “They would like to be able to live in a variety of different communities.”
A number of people attending Weldon’s talk, while not embracing his bill outright, said it’s an idea worth pursuing.
SOURCE: Florida Today
