WASHINGTON (Reuters) - Real estate investors would get a tax break on new rental properties under a Republican plan to help reduce the overstock of homes, party leaders of the U.S. House of Representatives said on Wednesday.
At present, a homeowner who sells his primary residence is not taxed on the first $250,000 in profits, or double that amount for married couples. The Republican plan would extend that tax break to investors who buy distressed homes and rent them out.
“It’s especially important in areas with a high number of foreclosed homes to get people who are willing to invest in these homes and get them reoccupied,” Rep. Kevin Brady told reporters as his party outlined elements of its plan.
Brady’s idea is one of many conceived by lawmakers and officials to try and arrest the slide in home values and reduced the housing overstock.
“If you buy a distressed home in your community or neighborhood and maintain it until the market recovers, you can keep the gain from your investment,” the Texan said, summing up his proposal.
Democrats who control the House have already passed their version of a housing recovery bill that included very little input from Republicans.
While they are in the minority in both chambers of Congress, Republicans continue to develop legislative initiatives they say will restore the economy to health.
In the House, Republicans are trying to strike an upbeat and optimistic tone as they discuss their party’s plans.
“Welcome to the next installment from the party of ‘yes’,” Rep. Mike Pence of Indiana said as his colleagues outlined elements of the housing aid plan.
On Tuesday, House Republican Leader John Boehner outlined his party’s plan to encourage savings for college and retirement.
“Washington is pursuing policies that are causing Americans’ savings to evaporate more quickly,” the Ohio lawmaker said in a statement.
Pence said his party’s initiatives would shield taxpayers from taxes as a way to stimulate the housing market, rather than dole out billions of dollars in federal aid.
Last year, Democrats passed legislation that will send $6 billion in grants to local governments so that they might buy and restore foreclosed homes. Last month, President Barack Obama outlined another program that will aim to keep 9 million borrowers in their homes with federal aid.
Reporting by Patrick Rucker, Editing by Diane Craft