Senate Passes Expiring Housing Tax Provisions

The popular section 25C $1,500 tax credit for certain energy-efficient remodeling activities is extended for 2011. However, under the rules passed in H.R. 4853, 25C would be substantially changed (reverted to pre-2009 rules). Courtesy of Inside Information

The Senate voted 81-19 to approve H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The legislation now moves to the House of Representatives, with a vote expected December 16, 2010.

Housing sector-specific expiring tax rules that were under debate. The following are worth noting: Section 45L $2,000 tax credit for the construction and sale/lease of a new energy efficient home would be extended for two years: retroactively for 2010 and for qualified homes in 2011.

The deduction for private mortgage insurance, as well as FHA, RHA and VA insurance premiums would be extended through the end of 2011, but as under prior law, only for contracts entered into after December 31, 2006. The deduction would still be subject to an income phase-out beginning at $100,000 of adjusted gross income (AGI) ruling out its use for anyone with more than $110,000 of adjusted gross income.

The credit is scaled back from a 30 percent credit to a 10 percent credit for qualified building envelope components. Qualified installed property must meet increased IECC 2009 requirements, except for windows and skylights which must meet Energy Star requirements.

These housing improvements and tax breaks will hopefully stimulate homeowners to work on their landscapes.

- Courtesy of NAHB