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ICBA Commends Action on Tax Proposals in Housing Bill

Washington, D.C. (June 19, 2008)—The Independent Community Bankers of America (ICBA) commends Congress for advancing beneficial tax provisions as part of a larger housing-related measure still being considered in the Senate.

"ICBA is pleased to see Congress taking action that will help homeowners and potential homebuyers during this distressed housing market," said Cynthia L. Blankenship, ICBA chairman and vice chairman and chief operating officer of Bank of the West, Irving, Texas. "These targeted tax-related proposals would help stem the ongoing decline in the housing sector. However, key differences remain between the House and Senate in the GSE and housing related titles of the legislation. We will be working with Congress to ensure that the interests of community banks are represented in the final legislation."

Among the ICBA-backed tax provisions in the Senate tax package are:

  • A homebuyer tax credit that would work as an interest-free loan giving new homebuyers an $8,000 tax credit — repayable over 15 years — to help jumpstart home sales and stabilize declining prices.

  • Allow the Federal Home Loan Banks to guarantee community bank letters of credit issued to enhance the credit rating of local government bonds. This provision would help ensure that municipal bonds guaranteed in this manner are tax-exempt just like bonds guaranteed by private bond insurers.

  • Granting an additional standard deduction for real property taxes for homeowners that claim the standard deduction. This would allow up to a $500 individual and $1,000 joint return for state real property taxes paid in 2008.

The House also included similar provisions in its version of the housing legislation. ICBA looks forward to working with lawmakers to pass these provisions and to reconcile the differences between the House and Senate bills.

ICBA first proposed to Congress a homebuyer tax credit in its nine-point economic stimulus plan in January 2008.