Authorizes a tax credit for the purchase of certain homes
This bill seeks to alleviate some of the financial burdens faced by first-time home buyers, particularly those looking to invest in areas where properties are considered blighted. By providing a tax credit, the state is encouraging the rehabilitation of these properties, potentially leading to increased property values, improved neighborhood conditions, and higher tax revenues over time as these areas become more desirable. The legislation indicates a focus on promoting affordable housing, addressing the crucial need for safe and livable residences in areas that have faced economic decline.
Senate Bill 719, introduced by Senator Washington, aims to provide a tax credit for individuals purchasing blighted properties in Missouri. The bill introduces section 99.720 to amend chapter 99 of RSMo, focusing specifically on encouraging home ownership among first-time buyers while revitalizing blighted neighborhoods. The bill outlines that eligible individuals can receive a tax credit of up to five thousand dollars against their state taxes for purchasing qualifying residential properties.
However, there may be points of contention surrounding the implementation of this bill. Critics could argue that the definition of 'blighted property' may lead to ambiguity in determining eligibility. There may also be concerns regarding the effectiveness of tax credits in ensuring true rehabilitation of properties, as the bill requires properties to be vacant for at least six months and blighted due to specific government determinations. Additionally, the requirement that buyers maintain the home as their principal residence for at least two years could be seen as restrictive for potential investors or those looking to resell.
The tax credit is non-refundable, meaning it can only reduce a taxpayer's liabilities, and if the credit exceeds their tax liability, it can be carried back or forward in subsequent years. This could limit the effectiveness of the tax credit for lower-income individuals who may not owe substantial state taxes. The bill also includes a sunset provision, which means the program is set to expire unless reauthorized by the General Assembly, adding another layer of complexity to its long-term viability.