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  • New Tax Credit for Homebuyers Unnecessary

    Senator Johnny Isakson (R-GA) reintroduced his plan today to create a $15,000 tax credit for homebuyers purchasing primary residences.

    The goal of the plan is to jumpstart the depressed real estate market. But as we pointed out last year when Senator Isakson introduced a similar bill, it will not work and it is bad policy.

    Furthermore, this additional tax credit is unnecessary because the tax code already encourages homeownership. Mortgage interest is deductible and the stimulus already created an $8,000 credit for first-time homeowners available for homes purchased in 2009.

    Posted in Ongoing Priorities [slideshow_deploy]

    11 Responses to New Tax Credit for Homebuyers Unnecessary

    1. Rainer, Macon, GA says:

      As a REALTOR, I am encouraged by the National Association of REALTORS to support Isakson's tax credit.

      I don't.

      I agree with your analysis. Very few buyers I've talked to are buying because of the stimulus credit. They're buying because they want a home and there are good values out there.

      It makes the credit a nice 'freebie' after the sale, but it isn't stimulative. We're in a real estate down turn because we had too much of a run-up in prices. It wasn't sustainable.

      Both NAR and politicians are wrong that housing needs to come back to 2006 levels. Price appreciation at that level will put more people out of the running to buy a home, credit or no credit. Instead, let the market do its own correction, and let's just absorb the pain for a little while. It will go away with less government interference.

    2. Pingback: New Tax Credit for Homebuyers Unnecessary » The Foundry | Money Blog : 10 Dollars : Money Articles.

    3. Barb -mn says:

      Any government interference is deliberate to corrupt. They're overlapping the same issue.

    4. Normca says:

      Obama's tax credit was limited to what seemed like low income – homes of less than $185,000 or thereabouts. The only home that can be touched in the So Cal area for below that figure is in East LA. That is why I believe a real tax credit is needed to spur activity. Like the tax credit to buy a car was limited to something similar. The war on wealth continues.

    5. RG St Simons Is says:

      Thought I was the only Ga. realtor to think this wasn't necessary.

      Again, it is the "do something" attitude of our lawmakers.

      I'd prefer less "do something" and more "do nothing" from the government.

    6. Taylor Hoynes says:

      As a Land Broker and involved in building and residential development services I have to disagree with this writer and my peers in real estate. I just met with a developer/builder in Georgia and he told me when Sen. Isakson introduced this the first time he had several calls from buyers and investors that would purchase some of his standing inventory. These were qualified purchasers. Typically the government came up with their usual failed approach and limited it to first time buyers with an $8,000 credit which probably most could not use in this economy.

      It must not be limited to anything to attract investors and qualified buyers. They are still waiting on the bottom to come. I was dead set against any of the so called bailout and as expected it is having very limited effect.

      This will not only get rid of some inventory, but return billions of dollars back to the banks which in turn will not need any more government money. He estimates the cost about $18 Billion. It must be capitalism that solves the problem and not the government which is responsible for most of this in the first place. And yes the greed of the lenders as well.

      Socialism is a disaster that is here and it must be stopped, but rather than throw billions away at least try and put a floor under the housing market and create desperately needed jobs.

      Taylor

    7. Joshua says:

      Rainer puts it very well. We are poor and all the bailouts have just priced us out of everything…and with inflation on the rise because of the bailouts…. Well it is doubtful our small wheat business will even survive.

    8. Normca says:

      Joshua and Taylor – Then take away the mortgage deduction. What is the answer? Certainly monies to Hamas, Acorn [one in the same] the union car companies and the banks was wrong. The housing market and the rest of the economy was messed up by the Community Reinvestment Act. The market needs qualified buyers or doesn't

      it ? To say what is wrong or will not be effective is not enough. What should be done ? I'd like to hear from the wizards of smart.

    9. Lynn B. DeSpain says:

      When jobs are being lost here in this Nation at a rate three times faster than that of foreclosures, it does not take an IQ higher than 20 to see that even with all the tax credits, bonuses low interest and all of that, it can't work fools!

      Hozro

    10. Whicket Williams Kin says:

      I am a real Estate Agent in texas. The 8000 now given is enough. The prices were vastly over the value. The whole world was crazy, inflating prices 200-300% in just a few years. It was nuts. It HAS to come into line with reality. You can't expect prices to rise back into that insanity again in our lifetime.

    11. duelles, santa fe says:

      Rainer says it well, let the real estate market find its truevalue with home buyers – not the government.

      Now! My moral dilemma. I sold my house in jul 2007. It is possible that I could qualify for the incentive by buying a house after jul 2009. Two years without a house qualifies me for the incentive.

      I have paper loses of $600K in the stock market due to, among other things, Government ineptness. In addition, my accountant – whom I hired because he is aggressive – will counsel me to take it if available.

      Perhaps, If I turn the incentive down, it will be forced upon me like I was a fiscally conservative Governor. Hmmmmm!

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