The newly proposed tax credit that is to be voted on Feb 10th by Congress has many implications for anyone associated with the real estate industry. This $15,000 tax credit would replace the $7,500 tax credit which only benefited first time homebuyers. This new credit is an attempt to motivate the six-figure income bracket to upgrade a princ. residence.
Certainly on the surface, it would appear to be great motivation to purchase. People in this income bracket are more likely to need a tax break. And wiping clean up to $15,000 in taxes, while at the same time taking advantage of the low housing prices and interest rates, would seem a no-brainer for anyone in that position. Also, this is a true credit as opposed to an interest-free loan, which the previous one was. This new credit would not have to be repaid. Home purchasers would have the ability to claim two $7,500 credits in successive years.
The credit is part of the $780 billion stimulus package and the bill still has to get through the House to be included as part of the overall plan. With all the pork ( a blog topic for another day ) that's tagging along with this stimulus package, it sure would be nice to see something of value such as this tax credit get pushed through along with it.
There are, of course, some dissenting voices. Quoting a comment from a Bloomberg interview, Robert Carroll, VP for economic policy at the Tax Foundation, states that, "Propping up a failing industry is certainly outside the scope of the stimulus package."
To which I can only say, if Mr. Carroll has gone through the package item by item, and his biggest issue is a homebuyers' tax credit, he must eat a lot of pork dinners.
Comments(9)