(Adds details in paragraphs 3-7)
SAO PAULO, Feb 8 (Reuters) - The Brazilian government will send a bill to Congress proposing a fine on homebuyers who cancel the purchase of a property be limited to 10 percent of the value of the house, a source with direct knowledge of the matter said on Wednesday.
Brazilian homebuilders have been hurt by soaring cancellations amid the country's worse recession on record. In the absence of legislation, Brazilian courts have sometimes ruled in favor of homebuyers being refunded all or part of their down payment if they cancel a house purchase.
According to the source, the National Monetary Council, which regulates the financial system, will discuss an increase in the price threshold for properties eligible to be financed through deposits in the workers' severance fund FGTS.
Under the plan, the threshold for eligible properties would be raised to 1.5 million reais from 950,000 reais. The measure would affect home purchases in the states of São Paulo, Rio de Janeiro, and Brasília, said the source, who spoke on condition of anonymity.
The rise in the limit, valid until September, is a temporary measure that will consume between 400 million reais and 500 million reais from the FGTS, the source said. For homebuilders, it is an opportunity to reduce inventories, associations representing those companies told Reuters.
Brazil has seen a shift in policy from focusing on low-income housing under leftist former President Dilma Rousseff to broader support for a construction industry struggling with the recession.
Earlier in February, Reuters reported the government's plans to dedicate an additional 500 million reais of the FGTS workers' severance fund to home financing, and a plan to raise the price threshold of eligible homes nearly 60 percent to as much as 1.5 million reais.
(Reporting by Marcela Ayres; Writing by Ana Mano; Editing by Daniel Flynn and Alan Crosby)