According to the "Worker, Homeownership and Business Assistance Act of 2009" signed into law November 6 by our President, the First Time Homebuyer Credit is now a very flexible, liberal policy for folks to take advantage of. It makes you wonder if anyone put any thought into the consequences of such a law---and if they did, what is the ultimate goal of said law? Skin-deep it is full of positives. I'd be interested to hear what others think the consequences may include.
1. You don't even need to sell your current house to qualify for the $6500 credit. Simply turn your existing home into a rental.
2. Current ownership of the home is not even a requirement. Just had a divorce? But lived in your previous home for five consecutive years out of eight? You qualify.
3. The purchase price threshold is $800,000.
With every new law, I think it is vitally important to look past the feel-good perks of today to the lasting consequences. Are we perpetuating the very thing that got us into this mess by continually extending money towards folks who may not be able to take advantage of the rules elsewise? Additonal food for thought: for every New Home Buyer Credit ($8000) extended, it costs our taxpayers $64,000. Hmmm.
I suppose I'm a bit counter-culture to my industry's party line---but I'm curious what others have to say. BTW: Please speak to your own CPA for their own understanding of the new law. This post is by no means meant to convey any legal guidelines and or suggested uses.
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