New Jersey Governor Vetoes Homebuyer Tax Credit

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New Jersey Governor Vetoes Homebuyer Tax Credit

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Being the chief executive of cash strapped states such as New Jersey is difficult at best. Teetering on the verge of bankruptcy, New Jersey's legislature overwhelmingly approved a $100 million tax credit for homebuyers planned to begin when the federal program expired. Governor Chris Christie saw the need for the program but simply could not find the money.

Therefore, Governor Christie vetoed the bill. The Governor was elected based on his promises to bring New Jersey back to fiscal balance. As he saw it, the homebuyers tax credit, even though spread over three years, was an expense the state could not afford. In his veto Christie said the money would have been used by people already committed to buying homes and would "briefly and artificially inflate home values."

Of course, realtors, builders and real estate industry observers see it differently. They support their argument noting that in May, following the expiration of the federal tax credit, home sales dropped 23 percent and then 27 percent in June. What is usually a busy time for the real estate market has become even slower than in the past two years.

The legislation sailed through both the New Jersey Senate and Assembly. Passing 38-0 in the Senate and 67-8 in the Assembly virtually everyone agreed the credit was exactly what the state's economy needed. However, in a state with close to 10 percent unemployment and massive debt, Governor Christie would not spend the money.

Mary Petti, a Netuchen realtor, said there were mixed feelings about the state tax credit. While the rebates had to end at some point, they were a definite incentive for people who were undecided about buying a home. "There are still buyers out there, regardless of whether there is a rebate or not," said Petti.

Another realtor who admitted disappointment in the veto gives Governor Christie some credit. He feels the credit would have helped the market short-term. He said, however, he has confidence that Christie is trying to do best for the state over the long-term.

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Tags: • bankruptcy • homebuyers • home sales • new jersey • tax credit • federal tax • home values • buying homes • buying a home • homebuyer tax credit • homeowner • tax refund •

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