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My real estate reviving plan. A simple and effective stimulus plan.

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While having a short sleepless moment and thinking about Obamas task for today to get the economy going, i came up with the following idea.

We have high unemployment ( !0 % ) that needs to be solved with work and business activities in the states. All the government ideas to give every one a few hundred $$$ will not work except for Walmart and China where most of the money goes. The middle class will just use it to pay off some debt.

I propose we make 10 % of the purchase price of a home tax deductible up to a max. of $ 50,000 for a $500,000 home. I was also thinking to make this higher for new construction, maybe 15 %. This would be valid for a limited time, case in point; 2009. This can be implemented very quickly.

Home construction,remodelling,interior decorating is a major stimulus for the economy as we saw in the early years of this decade.

Maybe a simular system can be designed for domestic produced cars. But I am not sure about political problems with Japan, Korea and Germany.

I did not do a reality check on these numbers ,maybe one of the accountants that see this blog can do that for me.

Let me know what you think. Have agreat day!

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Posted by Castellum Realty - Everard Korthals - Lancaster real estate on 01/21/2009 09:18 AM

Comments (13)

Economy, Stimilus Plan in the ActiveRain Channel

real estate revival, economic stimulus, unemployment

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13 Comments on My real estate reviving plan. A simple and effective stimulus plan.

JAN

I like the idea. I have no idea if such is doable. Great with the 2009 time limit to add urgency. Very Obamaish - providing the good ideas from the bottom up. Hope you pass it to his organization.

In my very quick made assumptions I used the following numbers.

# houses sold in 2009 =6 mio, average price of the homes $ 300,000,average tax bracket 20 %

Using these numbers I come up with a cost to the government of $36 billion.Keep in mind that we take a lot of people of the jobless list, and back to work that will be paying taxes ,companies make more profit ,and in the end it should have a quick , positive impact.I don't want to do all the detail work.Let to politicians do it with their staff .They are paid to sort it out .

Can you pass this idea along to Gov. Rendell and Chris Carney? I maybe can get the suggestion to Carney directly.

JAN

I have no contact with present politicians .The one's I used to meet were voted out of office,but I will see if there is a website where I can to send this idea to. Maybe Rush L.

Sorry to hear that; I think the Dems could possibly appreciate a good idea such as yours and not judge it based upon your political preferences and affiliations.

I sent a message to the PA governors office.It will be interesting to see if the actaully reed their e'mais

JAN

Well, I can't comment on that. You may have raised a very valid point.

JAN

I've heard of similar plans being brought forth to the state. Hopefully with you and others like you, something will be done to remedy these issues. Great post.

JAN

Yesterday I heard the same proposal on Mad Money by Jim Cremer .He proposed it only for old homes .He probably ment existing homes.

Hey Everard, you may find this interesting:

"The Lemoyne-based Pennsylvania Builders Association (PBA) has teamed up with more than 600 organizations that are part of the National Association of Home Builders' Fix Housing First initiative. The initiative urges Congress to use a chunk of the next stimulus package to usher in house-buying incentives with a portion of the next stimulus funding.

That money should give homebuyers a 10 percent tax credit of between $10,000 and $20,000 on the houses they purchase, builders said."

Penn Business Journal

It looks like others are jumping on this bandwagon.

Glad to see that there is still some common sense .Only I think $ 10K -$20 k is not going to do the trick.The low end does not need the stimulus.We see now already that renters with a combined income of $ 65,000 can buy a $ 200,000 home.This part of the market is working ,at least here in Lancaster County.It is the $300,000 and up that needs he

FEB

I am thinking we should add investment purchases to the deduction idea, to stimulate speculation by small and mid-size real estate investors. There's going to be a lot of inner-city homes in rough shape...

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