Congress giving homebuyers a $6,500 tax break

[AlphaCentauri]

Source: AP

Buying a home is about to get cheaper for a whole new crop of homebuyers — $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House could vote on the bill as early as Thursday.

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.

"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.



Read more: http://www.google.com/hostednews/ap/article/ALeqM5hJJraNRE6DjWj2orF7SYJ12PADEAD9BPCLHO2

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once again government manipulating the market and prices, repugs worst nightmare? of course not, they are so happy speculating with real state.

[itsrobert]

1. So with people who own homes putting their house on the market

to buy another one, how will that not increase the inventory of houses for sale? Wouldn't that lower prices, because more homes will be on the market?

[quakerboy]

9. I am afraid i am missing your point.

Is it that you think this will encourage people to sell their homes to buy new homes?

[Robb]

2. Goddamnit.

This is the stupidest thing. And I even have a house for sale.

We are propping up a market, the beneficiaries of which are the same fuckers who are putting people on the street.

[AlphaCentauri]

5. the next bubble in the works

it's not helping people but artificially stabilizing prices so the banks don't lose money mean while many people get hooked into bad economics

[Yupster]

37. Yes - hasn't this bubble just burst?

Must we really blow it up again?

[progressivebydesign]

28. No, it's helping people SELL their houses so they don't go into foreclosure...

why is this so difficult for people to see? As someone who is selling your home right now, I'm shocked that you don't see the value in this. It's already improved my local market, and pending and sold homes are at record levels this month here. Would you rather your house compete with short sales and foreclosures? Like the people down the street from me that didn't even bother to list their house for sale, just threw it up as a short sale at 100k LESS than our houses sold for a few months ago?

[Robb]

31. You're being played.

"Record levels." Record prices? That can't be. Record numbers? At what price?

Right above my other post is the correct answer. This tax credit artificially inflates prices, temporarily.

Meanwhile he value of the banks' portfolios remains. And people get into new loans and own real estate. At the worst time you can imagine.

You think this is the bottom of the RE market? If this is the bottom, why isn't every home that's even REMOTELY late getting foreclosed upon? That would be in the banks' best interest if prices were going up, get the house deed and sell it in the rising market.

Instead you're seeing lenders not even sending notices of default for 100, 150 days. I have a close family member who hasn't made a mortgage payment since July. Not peep one from the bank. And it's a huuuuuge bank. They could file a notice of default after 30 days. They haven't.

The banks, who have more resources to buy, hold, rent and move real estate right now than they've EVER had before, don't want to own in this market. That should tell you everything you need to know.

[beyurslf]

3. I bought a house this year and loved the tax credit. I can say it one reason I

decided to take the plunge instead of waiting another year or two.

[Robb]

4. Well, of course you did.

Everyone likes free money. But is it good public policy?

[peace13]

7. Well it wasn't actually free!

Or did someone invent a free lunch?

[Lance_Boyle]

13. Right - everyone who pays taxes (who doesn't qualify this credit) pays for it.

I'm about sick and tired of these lame-ass attempts to pump air into the housing bubble faster than it's leaking out. Talk about tilting at windmills! But I guess those who are in a position to buy now get a little something for nothing (nothing FROM THEM, anyway - plenty from the rest of us). Goody for them. :eyes:

[peace13]

14. There are some good things about people who are brave enough to buy their first home in this climate

These folks will be stimulating the economy by buying things to make their new home, home. They may be replacing property taxes in the community. Those that are buying homes that were foreclosed or close to foreclosure are improving the community. The shear act of buying the home gives some other family the ability to move out and possibly on to a new job in a different location. So there are benefits for all of us. In case you think that I or anyone in my family have been able to use this tax credit the answer is no, but I am able to see that some good is coming from it.

[ima_sinnic]

18. I got the credit and have been spending it entirely in my community

paying mostly carpenters and handymen to make some improvements and help me get in a winter's worth of firewood, including installing a chimney for a woodstove, blowing in attic insulation, replacing some damaged sheetrock, and adding some outlets. One guy who has worked off and on clearing brush, helping me burn it, and doing various handyman projects has been very helped by the income I've provided. I have given the local Aubuchon Hardware a lot of business. I also donated to two local charities that serve the homeless and stock food banks. Since I'm self-employed, I also earmarked a considerable portion for my 2009 income tax.

The people I've paid and businesses I've patronized have not been the only beneficiaries. I have gained a lot by getting to know a lot of interesting, caring, talented and very human people in my community. We have helped and enriched each other in a lot more ways than simply worker-employer.

Multiply that by however many tens of thousands of people got the credit, and I think many more people and communities have indirectly benefited.

[progressivebydesign]

29. and I hope 200 homes within a block of you go into foreclosure...

thereby dropping the value of your home to pre-1960s value (if you even OWN a home, which I doubt.) Most of the people here who whine about this stuff are just jealous because they live in their parent's basement.

[beyurslf]

17. It seems some argue that most 1st time buyers were not influenced by the money

so it was just giving money to people who were buying homes anyway. I am pointing out that it was a direct influence in my decision not to wait another year or two. I actually think it is a good idea all of the time.

[progressivebydesign]

30. Yeah, it was a republican who fought vehemently against this, citing that bogus claim about buyers.

You are the prime example of why this is such a brilliant program.. and how it helps the local communities. I'm so grateful for it! I HAVE to sell my house because of a divorce, and it pleases me that this may prevent even more short sales and foreclosures that would drive my price below what we paid for it recently.

[NickB79]

33. How difficult was it to get the tax credit early?

My wife and I just bought a house a month ago and were going to wait until tax time next year and just let our accountant do the paperwork for us, but I was just curious how much work it is to get the money early?

[Steerpike]

6. Just my luck!

I closed on my house October 2008. I have to pay back my first time homeowner's tax credit. As usual you have winners and then you have people like me...losers....waaah!

[Mari333]

8. I bought my house with cash from the proceeds of selling my other house

before the market collapsed. Wasnt much, but enough to buy a teeny home outright. downsized a LOT. which is fine with me, its just me and the pets.
I didnt need a huge old farmhouse and acreage anymore for just one person. My kids were raised.
BUT my current house is worth 20,000 less than I paid for it now. Thanks, Bush and Wall street.
So even tho I dont have a mortgage, I cant sell it if I want to leave. I will sit here til the cows come home I guess. Im not about to try and sell it at a loss.

[Phoebe Loosinhouse]

21. To give you a different perspective

You sold your farmhouse in the same bubble that you bought your current house in, so I would assume that you received an inflated price as a seller and that you then paid an inflated price as a buyer. Your 1st gain followed by your current loss should cancel each other out in my book.

And of course you can sell it anytime you choose to. You just don't want to experience what you see as a loss. You'll be there a long long time before prices rise again to meet the last bubble.

[vadawg]

36. i did similar but lucked out by selling my house at a hugely inflated value

:) then through sheer laziness we took to long to find a new house to buy and the market had crashed so i got to by a bigger place with more land in a short sale for a quarter of what i sold my old house for :) so even though the market has still decreased the house im in now is still worth more than we paid at closing...

[LeftHander]

10. Yay!! I am eligible!!!

Bought a house in spring of 2009.

Read the bill and the details are if you Bought after Dec. 31 2008, lived and owned in previous primary residence for 5 of the past 8 years. The you will be eligible for the $6500 tax credit. There are some income limitations and cost of home. But YAYYYY!!! the letters I sent fell on someones ears!! I live modest. And the 6500 will really help with some improvements, bills and a down payment on a reliable car.

I was really upset that I was not eligible for the 8000. Seemed like only the SUV/McMansion crowd were getting any breaks.Now I am glad I didn't plan on taking it as the IRS is coming down hard on those that did take the refund but were not first time home buyers.

[peace13]

15. This is a good example of how this program helps all of us.

Your plan to spend the money on improvements and auto means that the community will get a benefit as well.

[hugo_from_TN]

40. Do you have a link to the bill?

I bought a house in September and it seems like I might be eligible also.

[wuushew]

11. Can somebody please simplify the terms for me?

Does this exclude people who closed prior to the the last credit but have have not yet resided in a house for at least five years(i.e. bought a house in 2007 or 2008)? I know several people that fit that description and wish to accurately convey the legistlation which is being enacted.

[LeftHander]

12. See post above...

Yes...I would guess it does exclude them...ask IRS once bill signed.

you either bought a house After Dec. 31st 2008 and had not been a owner of a house for three years prior then you get 8000...

OR

YOu had been owner and occupant of primary residence for 5 of the previous 8 years. (assuming multiple primary residence possible in last 8 years...maybe not to prevent house flippers from abusing the credits.) and bought after Dec. 31 2008...Then you get $6500...


They extended the first time home buyer but added something for people who bought a primary residence.

Perfect for me cause I had owned...got divorced and bought my own place...in 2009.

So...YAYYYY again.

[northzax]

16. How about a fucking rent credit?

You know, for those of us who live in places where purchasing anything is unrealistic at best? What's with all the credits for the suburban upper-middle class, instead of the much more sustainable urban class or the working lower-middle class? In order to ever take advantage of this, or cash for clinkers or whatnot is to move farther from work, destroy greenspace and burn oil to get anywhere. Why is this sustainable? Give renters a one month tax credit and it will be spent. It won't just raise housing prices and continue to make it harder for first time buyers to enter the market. You get $6500 and get to write off your interest for the next 30 years? What about the millions of people living perfectly sustaiable and productive lives in major cities (NY, Boston, DC, Chicago, SF, Seattle, LA, etc, who will never own a place, because renting just makes more sense? Why are we punishing them by exclusion?

[LeftyMom]

20. Where's the help for affordable housing for the working class?

I mean I'm real glad we're all pitching in and helping suburbanites to buy a few more ugly assed tract homes, but the real pain in this economy is being felt by people who will never have a mortgage, and as usual nobody gives a flying fuck about them. As usual the real class warfare in this country is being waged against the working poor.

[TexasObserver]

19. Recommend

[spinbaby]

22. We may take advantage of this one

The kids are grown, so we're planning to downsize. $6500 would go a long ways towards covering the expenses of that adventure. Now if we could only find a house we like...

[naaman fletcher]

34. Your example is exactly why this is stupid..

The 6,500 may help you buy a house, which will only cause you to sell your house. So as you see, it will in no way help the housing market.

[AngryAmish]

23. I bought a house and I qualified for nothing. Why punish me?

[Lance_Boyle]

39. So the person upthread can have $6500 of our tax dollars.

I refinanced this year - wish that counted as a new purchase (hey, I DID buy a house - it just happens to be the same one I owned under the old mortgage!).

It's ridiculous.

[Odin2005]

24. We should not be subsidzing more suburban sprawl, we should be discouraging it.

[harun]

25. More fostering of a culture of debt.

[progressivebydesign]

26. this is wonderful news. I know that my neighbors who need to sell their homes will b happy.

I'm all for this stuff! I've SEEN the impact it's made on our local market, which took hit after hit for the past few years. Now, every single entry level home has gone sold or pending... literally. And it's starting to trickle up to mid-priced homes. New buyers are finding out that they can afford an entry level home, which (even with taxes) is less than renting for most of them. This, along with the Fannie Mae rent not foreclouse program, is going to make a big difference. It already has.

Or we can be like the teabaggers and whine about this, too. Any time you reduce the chance of foreclosure, by bringing buyers in or renting homes instead of foreclosures, you're improving EVERYTHING in your community... from crime rates, education, local jobs, etc. This is a good thing.

[Psephos]

45. This is regressive.

It helps those who don't need it...namely, people who already own a house.

It hurts those who do need it...renters who want to buy, but now see the price of entry-level housing rising beyond reach because the government is manipulating demand.

So wealthier people get wealthier, and poorer people get poorer.

:bounce:

[ShortnFiery]

27. How about some jobs instead? It's hard to buy a home when you have NO JOB! eom

[Roland99]

32. Cash for Fixer-Uppers? Cash for FU?

[Psephos]

35. Congress isn't "giving" anything. Other taxpayers are giving a $6500 gift to a privileged class.

Namely, millions of people who don't own homes are giving free money to those who already do.

What, you're a renter? What, even with a tax break you don't have 20 large in your back pocket for a down payment? Too bad. Be good little taxpayers and run along now.

Pure genius.

[harun]

44. Agree

[Ignis]

38. How about a renter's tax break?

Not all of us can afford to buy a house where we live/work.

[BreweryYardRat]

41. Cool. Now can we get affordable condos and co-ops for the working poor?

Including those of us who are going to be working poor as soon as we graduate?

I'd like to own a condo, and I'd be willing to settle for a small apartment...either is fine, so long as I'm not pissing away more money to crooked asshole landlords. I'd save enough in rent money to pay any reasonable HOA/maintenance fee.

But there's no way in hell most of us can scrape up even 10 grand to put a down payment on a condo.

[western mass]

42. Yay, more taxes for everybody else

So everybody who doesn't buy a home now has to pay a higher proportion of taxes. That $6500 has to come fom somewhere.

[Owl]

43. Agreed. This is a poor use of taxpayer funds.