Is a $15,000 Home Buyer Tax Credit on the Way?
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With the $8,000 first time home buyer tax credit set to expire in a little over two months, there is a great deal of interest in extending the credit. Estimates from the NAR and from Moody’s claim that 350,000 to 400,000 homes would not have been sold this year without the tax credit. It has done a great deal in terms of encouraging people to finally take the plunge.
But what happens when the first time home buyer tax credit expires? And what about people who want to help stimulate the housing market (and the economy), but aren’t first-time home buyers? That question was asked earlier this year when the debate over the economic stimulus bill took place. There was talk about a $15,000 tax credit for all home buyers, but it was eventually abandoned for the $8,000 first time credit. Now, though, reports the New York Times, that $15,000 tax credit could be back on the table:
Now the sponsor of the original Senate bill, Johnny Isakson, Republican of Georgia, is back with a new bill that would give a maximum $15,000 credit to any buyer who stays in a home for at least two years.
“The problem now is not first-time buyers, it’s the move-up market — the guy transferred from Chicago to Atlanta who can’t sell his house,” said Mr. Isakson, a former real estate agent.
Opponents, as might be expected, express concern that renewing tax credits for home buyers will lead to a government program that won’t die — and one that the real estate market becomes too dependent upon.
It is a good point. But perhaps instead of making such a large tax credit, the government could do a tax deduction for buying a home — something smaller, along the lines of $2,000 to $5,000, depending on the cost. Sort of like the tax deduction you can get for mortgage loan interest that you pay.
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