Congress to expand home buying tax credit

[spidey07]

It's about time we get some real stimulus and incentives going. The 8000 dollar first time buyer credit was said to incent 350,000 home buyers to make the move. That is being extended until 4/10. But even better is there is a 6500 credit for ANY home buyer that has been in their current home 5 out of the last 8 years. That's going to incent people that have been on the fence. The only bad part about it is the income restrictions (125K individual, 225K joint).

http://www.google.com/hostednews/ap/article/ALeqM5hJJraNRE6DjWj2orF7SYJ12PADEAD9BPFFR01
"Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30."

 

[ayabe]

Good news, this is probably the best "stimulus" program out there by a mile.

 

[spidey07]

Yeah, my state actually has a 5000 dollar credit if you buy a NEW home. So for some folks the state plus federal credit would be $11,500. That's a very stimulating number.

 

[her209]

But... but... but... you're just taking away the demand from the future home buyers and moving them to today.

 

[alchemize]

Another government handout I'm not eligible for

 

[RyanPaulShaffer]

This program is a good thing, and I am glad to see that they are continuing it. This is good incentive to get people to go out and buy homes instead of rent, if they can afford to, of course. It's nothing like Cash for Clunkers really, because Clunkers took perfectly viable products (used cars traded in for the credit) and just destroyed them, which was a huge waste and a drain on the used car market. There were also huge problems with Clunkers, such as severely underestimating the budget, massive problems getting the paperwork to go through, dealerships never getting paid, etc.

I cannot really see anything wrong with providing a tax credit as an incentive for home ownership. Sure, I wish they'd rather just cut taxes 8k across the board, but this is a good baby step.

 

[Exterous]

Now if I can just get them to forgive the $7500 interest free loan we got for buying our house last year.....

 

[spidey07]

Now if I can just get them to forgive the $7500 interest free loan we got for buying our house last year.....

I haven't heard of any talk about that and the probability would be pretty low. They already incented you to buy so there's no real reason to forgive it.

ps - this passed with 98 yays. That's bipartisan support.

 

[StageLeft]

How silly. So the government is now incenting home owners who've been in their home for at least 5 years to upgrade and most likely buy a more expensive house?

I wonder if this economy is going to be able to ween itself from stimulus in the future. As long as these measures are needed, it's on life support.

 

[ayabe]

How silly. So the government is now incenting home owners who've been in their home for at least 5 years to upgrade and most likely buy a more expensive house?

I wonder if this economy is going to be able to ween itself from stimulus in the future. As long as these measures are needed, it's on life support.

Have to get this glut of empty houses off the market, it's affecting all homeowners.

I really don't see how anyone can poo poo this, it's about the only thing keeping housing from dropping even further. I think some of you guys are just pissed you can't get in on the action.

At least Alchemize admits it,

 

[EagleKeeper]

How silly. So the government is now incenting home owners who've been in their home for at least 5 years to upgrade and most likely buy a more expensive house?

I wonder if this economy is going to be able to ween itself from stimulus in the future. As long as these measures are needed, it's on life support.

It may also increase the supply of lower end homes as the existing sellers move up toward the 600K limit.

The 150-250K homes are getting snapped up quickly - if more can be put on the market, some of the renters can move out

 

[BeauJangles]

This program is a good thing, and I am glad to see that they are continuing it. This is good incentive to get people to go out and buy homes instead of rent, if they can afford to, of course. It's nothing like Cash for Clunkers really, because Clunkers took perfectly viable products (used cars traded in for the credit) and just destroyed them, which was a huge waste and a drain on the used car market. There were also huge problems with Clunkers, such as severely underestimating the budget, massive problems getting the paperwork to go through, dealerships never getting paid, etc.

I cannot really see anything wrong with providing a tax credit as an incentive for home ownership. Sure, I wish they'd rather just cut taxes 8k across the board, but this is a good baby step.

It's a good idea, but poorly executed and the idea of expanding it is just a waste of taxpayer money. If anything, they should make it specific. Provide bigger tax breaks for people that buy homes in areas that are hardest hit by foreclosure. That means no more tax credits for homes up to $800,000.

I find it funny that people defend the homer buyer credit, which has many of the same problems as Cash for Clunkers, while ripping the CARS program.

 

[spidey07]

It's a good idea, but poorly executed and the idea of expanding it is just a waste of taxpayer money. If anything, they should make it specific. Provide bigger tax breaks for people that buy homes in areas that are hardest hit by foreclosure. That means no more tax credits for homes up to $800,000.

I find it funny that people defend the homer buyer credit, which has many of the same problems as Cash for Clunkers, while ripping the CARS program.

The federal gubment couldn't do that, but the states can. Like I said my state has an additional credit to stimulate NEW homes, which means jobs. And you can't compare this with cash for clunkers - they are totally unrelated as are their intentions and implementations.

 

[ElFenix]

Have to get this glut of empty houses off the market, it's affecting all homeowners.

I really don't see how anyone can poo poo this, it's about the only thing keeping housing from dropping even further. I think some of you guys are just pissed you can't get in on the action.

At least Alchemize admits it,

use the $8,000 to bulldoze them. there's too many houses on the market already. we're over invested in real estate because of perverse incentives in the tax code. it's an inefficient distribution of resources and only serves to drag the economy down.

 

[shira]

Have to get this glut of empty houses off the market, it's affecting all homeowners.

I really don't see how anyone can poo poo this, it's about the only thing keeping housing from dropping even further. I think some of you guys are just pissed you can't get in on the action.

At least Alchemize admits it,

For existing homeowners, any new house they buy means another house they leave empty and need to sell (unless they're able to keep their existing home as a second home or rental property). So I don't think this new benefit will be nearly as stimulative as the extension of the first-time-buyers benefit.

 

[ayabe]

For existing homeowners, any new house they buy means another house they leave empty and need to sell (unless they're able to keep their existing home as a second home or rental property). So I don't think this new benefit will be nearly as stimulative as the extension of the first-time-buyers benefit.

I agree, perhaps I should have been more clear, I support the extension of the program for first time buyers, this other provision isn't that great.

 

[CPA]

Awesome! I used to only help pay for someone buying. Now I get to help the person selling, as well.

/sarcasm

 

[ayabe]

use the $8,000 to bulldoze them. there's too many houses on the market already. we're over invested in real estate because of perverse incentives in the tax code. it's an inefficient distribution of resources and only serves to drag the economy down.

I'd say you're mired in a bit of revisionism here.

The reason there's too many houses on the market right now has nothing to do with tax codes and everything to do with fast easy credit based on nothing. That's what fueled the housing crises.

 

[StageLeft]

Have to get this glut of empty houses off the market, it's affecting all homeowners.

I really don't see how anyone can poo poo this, it's about the only thing keeping housing from dropping even further. I think some of you guys are just pissed you can't get in on the action.

At least Alchemize admits it,

You could use that argument for absolutely and literally every single product that has a glut of supply and insufficient demand.

I find it funny that people defend the homer buyer credit, which has many of the same problems as Cash for Clunkers, while ripping the CARS program.

I also find it very strange. Conceptually they are the same thing. Government filling in with extra money where consumers feel something is otherwise too expensive.

 

[RyanPaulShaffer]

It's nothing like Cash for Clunkers really, because Clunkers took perfectly viable products (used cars traded in for the credit) and just destroyed them, which was a huge waste and a drain on the used car market. There were also huge problems with Clunkers, such as severely underestimating the budget, massive problems getting the paperwork to go through, dealerships never getting paid, etc.

I thought I was pretty clear about why I viewed this differently than the Cash for Clunkers program...

...perhaps I should have written it in big, bold letters...

Are we bulldozing houses when someone buys a new house and gets the $8,000 tax credit, destroying a perfectly functional house and removing a "used" house from the market, thus inflating the price of the pre-owned market (through reducing the stock for no good reason) and making it tougher for someone who perhaps can't or doesn't want to buy new?

Has the housing credit been fraught with widespread administrative issues, severe underfunding, etc.?

No? All righty then...the reasoning for my stance is pretty clear, like I said in my original post...

 

[shira]

You could use that argument for absolutely and literally every single product that has a glut of supply and insufficient demand. I also find it very strange. Conceptually they are the same thing. Government filling in with extra money where consumers feel something is otherwise too expensive.

Totally different conceptually, at least from a right-wing, ideological point of view:

Cash for clunkers: A government VOUCHER. Key phrases: Government Spending. Big government. ==> Bad!!!

Home buyer's credit: A TAX CREDIT. Key phrase: Tax cut ==> Fantastic!

 

[StageLeft]

I thought I was pretty clear about why I viewed this differently than the Cash for Clunkers program...

...perhaps I should have written it in big, bold letters...

Are we bulldozing houses when someone buys a new house and gets the $8,000 tax credit, destroying a perfectly functional house and removing a "used" house from the market, thus inflating the price of the pre-owned market (through reducing the stock for no good reason) and making it tougher for someone who perhaps can't or doesn't want to buy new?

Has the housing credit been fraught with administrative issues and severe underfunding?

No? All righty then...the reasoning for my stance is pretty clear, like I said in my original post...

So if C4C was changed such that it would not crush the cars you'd have been ok with it? Again, you could use these stimulus arguments for literally any industry in the country that is being hit by the economy.

 

[RyanPaulShaffer]

So if C4C was changed such that it would not crush the cars you'd have been ok with it? Again, you could use these stimulus arguments for literally any industry in the country that is being hit by the economy.

I would have been more for it if they hadn't destroyed perfectly functioning vehicles, but that still doesn't address the massive administrative errors, severe underfunding, etc. that Cash for Clunkers experienced from Day 1.

 

[shadow9d9]

What about if you've owned a house in the last 3 years and sold it... and now buy?

 

[spidey07]

What about if you've owned a house in the last 3 years and sold it... and now buy?

No money for you. If you're referring to the first time buyers credit look up the details, I think you have to not have owned a home for 2 or 3 years to be considered 1st time.