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Homebuyer tax break update

Are you ready for the big news? The first-time homebuyer tax credit might be extended beyond its Nov. 30 cut-off day and possibly expanded.

OK, so that's not such a shocker. Talk of doing just that has been around since the tax break's latest incarnation back in February as part of the American Recovery and Reinvestment Act, aka the Obama stimulus package.

Folks, and by "folks" I mean the housing industry, have been pushing for at least a continuation of the credit, which according to some estimates could help 40 percent of all homebuyers in 2009 get a house.

But House Speaker Nancy Pelosi officially acknowledged today that Capitol Hill will be looking at renewal of the $8,000 credit.

"And the question is," added Pelosi, "would that be just first time homeowners or would you open it up to other purchasers of homes?"

Eye_on_irsHey, you tell us!

I hedge my predictive bets on the question a bit in First homes, continuing taxes posted at my other blog, Eye on the IRS.

I said it before, most recently in Housing tax topics roundup, and I still believe it now: It's time to cool it on the housing credit. 

The first-time homebuyer credit, like many tax breaks before it and unfortunately many more that will come after it, is flat out pandering to political special interests that wield a lot of power, and political action committee money, in election years. And yes, we''re fast approaching the 2010 midterm voting cycle.

Not that I'm cynical or anything -- I prefer the terms "realistic" or "pragmatic" -- but if I had to bet, I'd say the election cycle calendar pretty much ensures we'll get some sort of real estate industry supported tax credit extension.

Maybe just enough to get us to Nov. 2, 2010, but a continuation nonetheless.


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Pam Baggett

I agree, Kay. The first-time homebuyer gift is a contrived benefit. I see it as a disadvantage for those of us who already own a home we worked hard to pay for. $8,000 might be just what I need to be able to build the house that we put on hold during this unpredictable economic times.

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