The New York Times reported that Congress is attempting to pass a bill that will allow all buyers—not just first-time home buyers—to cash in on a $15,000 tax credit meant to stimulate the economy. This would increase the Federal Government’s tax credit program from a $15 billion stimulus to a possible whopping $100 billion dollar future venture.
The National Association of Realtors is in full support of the potential increase, and believes that “expanding the credit to all buyers and raising it to $15,000 could be what brings down inventories and creates stabilization in the housing market.”
Of course, opposition exists. JP Morgan Chase feels that the venture will be a positive spark in the housing market, but thinks that the tax credit should be limited to first-time homebuyers. Others feel that adding such a significant dent to the deficit may put us in a bind in the coming years.
The Consumerism Commentary does a good job of laying out the details of the new stimulus package:
“The credit would be 10% of the purchase price of the house, up to $15,000.
This idea is modeled after a $2,000 tax credit for homebuyers that helped the
country rise from a recession in 1975. The credit would be spread over two
years. For example, if you buy a house with a purchase price of $300,000, you
would qualify for the maximum credit of $15,000. The first year you claim the
credit, you would receive $7,500, and you would receive the remaining $7,500 the
Additionally, in its current form, the requirement to repay the credit
over time will be waived. The estimated cost of this amendment is $18.5 billion.
This credit, which was once set aside for first-time homebuyers, would now apply
to anyone who purchases a house, including investors, speculators, flippers, and
any family struggling to afford a place to call home.”
So homebuyers should keep an eye out and fingers crossed for new developments in the housing market!