New Bill Seeks to Extend (and Expand!) the Home Buyer Tax Credit

Janet,

  The next thing that will happen is that they add an  excise tax on the Sale of the home to help  pay for this broad  and expanding program.   The money has to come from somewhere( and it's not in the budget) .so  the Seller  will have to pay.  Give to Buyer, take away from Seller. ?

I think this new bill written by a NC Republican is just a giveaway to his biggest campaign donor----The National Association of Realtors. I am a Realtor too but I am also a taxpayer. Sure this credit helps our business but Realtors stop looking at only what is good for you and start considering what is good for America as a whole. We taxpayers are 1.6 trillion in debt just this year and you give out more government handouts. If you argue that stimulus is needed then at least make it req'd to be paid back interest free like the first $7500 tax credit. At least that way we would get our money back. The government is again messing with the free market to rig it to get the results it wants. This is America and like drug addicts most americans are addicted but instead of being heroin it you all are addicted to social programs and government handouts that benefit you. Would you all support $8000 given to all renters? That would stimulate the economy too! No, of course not because you all are only looking at what is good for yourself--more sales. Take a look at the big picture and stop government handouts.

The law of unintendend consequences....if this bill is passed and applies to all homebuyers buying a principal residence you will see a flood of homeowners buying some cheaper foreclosure getting the $8000 and just letting their current home go back to the bank. Is this what we are paying $8000 to stimulate? If it has to be paid back over time then you will still see the stimulating effects without the bill that will eventually come due to all us taxpayers.

With just three months left before the first-time homebuyer tax credit  joins Cash for Clunkers in the ash bin of stimulus programs, will Congress extend the program another year quickly enough to prevent a disruption in the marketplace ?

Unfortunately, it's virtually certain that buyers will run out of time to buy a home long before Congress gets around to it, since it takes twelve weeks for the average first-time buyer to find a home and four to six weeks to close.  The tax-writing committees-Finance in the Senate and Ways and Means in the House-have yet to consider the matter.

 Making it more complicated is the "ask"-that's Washington talk for what you really want above all else.  The "ask" in this case is not as clear as it might be.. 

First of all, the two biggest industry groups, the Realtors and home builders, say they want more than an extension.  They also want the credit expanded to include all four to five million homebuyers next year.

 "We say -- if (the credit) is working for first-time homebuyers, then why not for all buyers, with no income limitations? We would like to see the expiration date extended (beyond Nov. 30). Expanding the credit is really the way to stabilize the (housing) market -- by making it available to everybody," NAR's Mary Trupo told columnist Ken Harney recently.

The NAHB also wants net operating loss (NOL) relief legislation that would help all businesses, especially its publicly held members, by eliminating the current $15 million cap on average annual gross receipts and allowing 2009 losses to be eligible for the expanded carry back.

NAR's top lobbyist, Jerry Giovaniello, speaking recently at a meeting in Las Vegas, gave odds of "better than 50-50" of getting Congress to extend tax credit past its December 1 deadline.  As for expanding it, he told the Las Vegas Sun that it that it would cost the U.S. Treasury, and there would likely be demands that the money to make up the difference would come from within the real estate industry.  And that could include eliminating the mortgage industry deduction, he said.

Senate Majority Leader Harry Reid (D-NV) is more optimistic about the extension outlook.  In a conference call with reporters three weeks ago said "Congress has to extend the credit by the end of the year."  He was not so positive about expanding it.  It's worth noting that the Senate loved the tax credit earlier this year and passed the $15,000 version.  The housing industry's greatest hurdles were in the House last February and they may still be there.  The House, however, controls tax policy.

A clog of major, high priority legislation faces Congress with it returns from
August recess:  health-care reform, climate change and energy, financial system regulatory reform and a new Consumer Financial Protection Agency. It could be tought to make the deadline.

Then there is the growing unpopularity of stimulus plans.  The on-again, off-again Cash for Clunkers may leave no lasting mark on the auto industry.  Many leading economists argue the homebuyers' credit is nothing but a temporary prop to housing sales and it too will leave no legacy.  Taxpayers are concerned about costs and what they are getting for their billions and trillions.  A USA Today poll in early August, for example, founding adults evenly split on whether they stimulus package will make the economy better over the long term.

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 For more, check out Real Estate Economy Watch.

Janet,

It's hard to disagree that extending the tax credit would be a positive situation but I really think it would hurt us, (agents and builders) because of one main reason.  People will always wait until the last minute to take advantage of a deadline.  If the credit is extended then people will wait even longer because they know they can.  If it is extended I would hope they would not report this until the day the credit is to expire.  The last thing we want to do is give prospects another reason to wait and that is exactly what extending the credit would do.

Thanks,

Josh

Janet,

I'm a little East of you in the Yuba- Sutter area and we don't have enough inventory for the Buyers we have now. I welcome the extension, moving the excess inventory will help stabilize our maket, and lt people buy a home that suits them , and not feel rushed to purchase , just to get the credit.

I encourage all of you to contact your elected officials.  If you don't have their e-mail address you can use these;

Congress:  https://writerep.house.gov/writerep/welcome.shtml

Senate: http://www.senate.gov/general/contact_information/senators_cfm.cfm

I'm in agreement to open it up to anyone that buys a house.  Buy a house, get an $8000 tax credit.  Includes investment properties too.

As I read some of these comments I can't believe more Realtors and lenders don't figure this out. We as a country are TRILLIONS of dollars in debt. We can't GIVE AWAY any more money for this so called "soft landing".

Do you think auto sales will have another record setting sales month in Septmeber now that the cash for clunkers program is gone? All that program did was accelerate sales for dealerships and take some perfectly viable cars off the market. The UAW and Sierra Club just upped their campaign contributions!

Let me ask a question? What is a $150,000 home worth WITH and WITHOUT an $8,000 tax credit? In other words, would a buyer in September pay the same for that home in December when the tax credit is gone? Have we just artifically inflated the market AGAIN- the same as we did with "fog the mirror" loans?

The ONLY thing that will get housing stabilized and moving up is when buyers find that magical "value" button- They now feel the house is worth as much or more than the money they are exchanging for it. First time homebuyers have to feel it's a better deal to buy than rent (financially and emotionally).

Government incentives are not a long term answer to a market correction. Let the market correct itself and only then will a true recovery take place.

If you don't believe in these fundamentals then I hope you FULLY support tax credits for people that buy new furniture, appliances, doggie treats and bottled water. Fido appreciates an email to your representative.