Renter's Tax Break

By David Nelson Jones

I believe that the American Dream of owning your own home should become a reality for people who are renting. That is why I am proposing a Renter's Tax Break that will enable people to deposit pre-tax dollars into a Future Homeowners Account for a downpayment on purchasing their own piece of the American Dream.

I propose a tax break for renters which will be deposited into a down-payment account towards a future home purchase. Republicans believe in an ownership society and this proposal will benefit everyone because people will literally be investing in their future homes.

This is how it will work - for every dollar spent renting their current residence they will receive a 5% tax break. This tax break is pretax savings that will be place in a Future Homeowners Account (FHA). The money in these accounts will be used on the lenders sides as financing for residential construction projects. When the renter prepares to purchase a home the funds from his FHA can be used for the down payment. Every three years the account matures to cash payout (up to %50) if the renter does not purchase a home.

Who Benefits and why:

• Renters o They save on taxes in a responsible fashion o Their overall future tax burden is lowered by bridging the gap to owning a home

• Landlords o Increases likelihood of people renting in one place for a set period of time o Increases likelihood of rent payments on time
• Realtors o More qualified clientele o Thoughtful buyers o Increased inventory from increase in new home construction
• Construction company o Construction projects increase o More qualified buyers
• Banking o Lower need of 100% financing o More qualified borrowers o More money to lend for construction
• Homeowners o More buyers on the market who qualify for loans o Reduce hazard of deal failing due to lack of financing
• Communities o Stable residents focused on the future