Will the $8,000 first time homebuyer tax credit be extended? Should it?
There seems to be a lot of buzz about the $8,000 first time homebuyer tax credit and its possible extension. It’s not getting as much attention though with the healthcare issue on the table. There are questions on both sides of the issue on its future.
On one side we have people concerned about the budget of the US and the loss of tax revenue at a time when the government is facing some difficult choices. I can see the point of this. Also on this side of the argument is that the program has some flaws and those need to be addressed in the form of another bill and let this current program end to re-draw the program in more effectual ways.
On the other side people talk about the economic recovery and social recovery this program has afforded to local economies & municipalities as well as neighborhoods. It’s helped get some of the lower priced inventory of homes, short sales and bank owned properties back into private hands to stabilize local property values. The National Association of Realtors and other housing groups also have statistics showing how homeownership improves neighborhoods & personal growth.
In my opinion the current program needs to end on November 30th, 2009 as intended and a new program enacted to better address the current market, economy and local issues involved.
The current program doesn’t address differences in property values in different parts of the US. Properties in the North East, West Coast, certain parts of the Mid-West and South have property values much higher than the rest of the country. $8,000 doesn’t mean as much when the qualifications for the higher home values practically eliminate buyers eligibility. Perhaps a graduated credit up to a certain amount would assist more buyers in higher value areas. There currently is talk of raising the credit ceiling to $15,000 to address this. Then there is the income cap levels for the program, with higher value property/regions it’s becoming increasingly difficult for an individual or couple to be able to practically afford a property and still remain within the current cap limits.
There is real concern about how much more the government can afford to subsidize the home market with the looming expenses of universal health care, financial reform, other economic stimulus as well as the 2 front wars in Afghanistan and Iraq. On the state & local levels we’re seeing many cutbacks, layoffs and other service belt-tightening from declining tax basis, business slowdowns etc.
It will be an interesting next several weeks to see how things will end up.