A little over a week ago, I mentioned that Congress was hinting at sweetening the home buyer tax credit a bit, and it appears now that we’re a few steps closer to such a measure, as the Senate voted unanimously to add an improved Home Buyer Tax Credit to the proposed stimulus plan.
While this topic is one that stirs debate, and nobody seems to really have a grasp on what the best solution is, helping the housing industry is at the top of many lists, since the real estate industry clearly has a direct effect on the overall health of our economy.
Here’s an outline of some of the highlights of the proposal:
- Home buyer tax credit of $15,000 or up to 10 percent of the purchase price
- Available to all home buyers and would not have to be repaid as long as a buyer lives in the house for at least two years
- Offers the credit on purchases from one year of the date of enactment and could be applied to the home buyer’s 2008 taxes
So, the question now, is this a healthy approach to help an ailing housing industry? Will this motivate home buyers to take advantage, and ultimately, will it help us move toward a real recovery, rather than just acting as a band-aid and prolonging a bad situation?
What say you?
About Ryan Hukill
Ryan, I enjoy your blog. On this particular question my problem with the government doing anything in the private sector is that it always leads to inequity for someone. For example I don't think our economy in Oklahoma has been effected like it has in other parts of the country. That's because we have not done the speculating that others have. I think market conditions have to be corrected by the market not by some artificial stimulus that will reward the very ones that got caught in their speculations. Just like government bailing out the car industry or the banking industry, this has created an artificial fix rather than a true correction by the very market that we operate in. It will come back to bite and will be worse next time because it was not fixed but just glazed over.
Dirk, it's great to have your input on this topic, and I have to admit that I feel the same about the bailout approach. Even though it may benefit me personally short-term (likely not), it doesn't help us in the long-term. In your opinion, should ANYTHING be done by the government, or should they stay out of it altogether?
Ryan, I think the least the government is in our lives the better. I know that laws have to followed, the defense of this country is very important and services that make our lives more convenient are essential. But the tax system we have with credits only complicate. However the political parties are there to get re-elected and they really should be more concerned with governing. But that's just my opinion.