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Liberalized Homebuyer Tax Credit

By
Real Estate Agent with Remax Integrity

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.

Colleen Fantini, Northeast Cincinnati Realtor
Comey & Shepherd Realtors - Landen, OH

Hi Alisha ~ You are not alone in your skepticism of the homebuyer tax credit program - my office manager announced some of the details last week at our meeting and a little corner of us quietly booed.  Then our in-house loan officer went on to explain all the changes in GFE and HUD-1's - a prime example of WHY GOVERNMENT SHOULD NOT INTERFERE with what they don't have experience in running.  We booed a little louder.  My loud comment was "and they want us to buy into healthcare?"  That received some applause, albeit from the same little corner that booed.  It is all completely ridiculous - like living through a chapter of Alice in Wonderland.  Thanks for being honest in your assessment of the tax credit program - hopefully more agents are as willing as you to admit it's fundamentally incorrect...it's like steroid shots for someone who really needs back surgery.

Nov 16, 2009 02:37 PM