The Georgia Senate overwhelmingly approved legislation Thursday that would give tax credits to buyers of single-family homes.
Senators passed the bill 42-4, dismissing objections that the state can't afford what the tax credits would cost in lost revenues during a recession.
Under the legislation, which originated in the House, home purchasers would receive income-tax credits of up to $3,600, or $1,200 for each of three years. To qualify, homeowners would have to apply for the credit within six months of the date the governor signs the measure.
A housing slump was the catalyst of the current recession in Georgia, and only a revitalized housing market would put the state on the road to recovery, said Sen. Chip Pearson, R-Dawsonville, who presented the bill on the Senate floor.
"There's nothing happening out there now to stimulate the market," he said. "This is a true stimulus in that (home buyers) have to act now. This won't be available next year."
But Sen. Nan Orrock, D-Atlanta, said the benefits the tax credits would bring to the state economy wouldn't be worth the cost.
Orrock cited a fiscal note accompanying the bill, which projected the tax credits would reduce state tax revenues by $166.3 million. Based on estimates that the legislation would result in the sale of an additional 1,100 homes, she put the cost of the initiative at about $150,000 per home.
Orrock raised similar cost/benefit arguments on Wednesday in opposing a package of tax credits for businesses that passed the Senate.
On Thursday, Pearson said the housing tax credits would pay off in the long run because the economic activity from the additional home sales would generate added tax revenues.
The Senate made several changes to the bill, sending it back to the House.