A plan to give buyers of new homes an income tax deduction has been sidetracked by senators who say state government should not meddle in the real estate market.
The House has approved a bill allowing buyers of new homes a tax deduction equal to two percent of the price of the newly-built home. The most anybody could deduct would be $10,000—two percent of a half-million dollar house’s price.
Backers think the deduction will pump life into the realtor business that has had high unemployment during the recession.
But St. Joseph Senator Rob Schaaf says the bill is unfair to people wanting to sell homes. “If I’m a person who has a home for sale you’re taking some of my potential customers out of the marketplace,” he says.
Another senator joins Schaaf, maintaining the free market will solve problems for realtors, and prices, not tax deductions, will determine who buys what house.
The senate sponsor of the billl has been forced to put the bill aside because of lack of time for further debate.