'Successful, costly' first-time-plus homebuyer credit ending
Tuesday, April 27, 2010
As Senators are grilling Goldman Sachs executives about that investment bank's part in the mortgage debacle, another by-product of the bursting housing bubble is ending.
The first-time homebuyer credit, which morphed repeatedly since its inception in 2008 as a faux credit, officially stops being available on April 30.
By that date, home purchasers much have a valid contract in hand and then close on the property by June 30.
And when Friday finally rolls into Saturday, we can all breathe and let the housing market find its real footing. Yes, that's likely to mean some more real estate ups and downs, but we all knew that was on the horizon. Now we can quit delaying the inevitable.
What price success? Sure, politicians who proposed and tweaked the bill at the behest of the housing industry say the credit, which for a few more days provides eligible first-time buyers an $8,000 credit and certain previous homeowners a $6,500 credit for buying another primary residence, has been successful.
But define success.
In reality and from a tax policy perspective, the credit has been singularly cost-ineffective.
That's the assessment in Home Tax Credit Called Successful, but Costly, in which New York Times reporter David Kocieniewski also points out that "most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible."
But hey, real estate agents had a new marketing tool for a while and federal lawmakers got new sound bites for their re-election campaign ads.
As I said, define success.
Time's almost up: All good (and bad) things, though, must eventually end.
If you're in the market for a first or another home, you better be wrapping things up this week.
While I honestly expected in this midterm election year for there to be at least some push to keep this credit going, it looks like Capitol Hill will quietly let it lapse.
- The federal homebuyer credit's 'exit strategy problem'
- Homebuyer credit semantics
- House hunting? Check out tax credit
- The home buyer credit's three E's: extension, expansion and effective date
- $10 billion paid out in home buyer claims, but how many were bogus?
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We have a similar credit here in Canada for the purpose promoting spending. It's called 'the Home Renovation Tax Credit.'
Basically spend on any home improvement including gardening and receive a percentage of it back on your taxes. Sounds weird, but it has really kept Home Depot busy and the economy seems to be moving ahead at a more and more comfortable pace.
Thanks for sharing,
Posted by: Guy G. | Tuesday, April 27, 2010 at 10:57 PM