Housing stimulus bill – nice name, who wouldn’t want it? Me, for one. It is a shell game.
The most talked about provision – the $7,500 tax credit for first-time buyers is hollow.
First, this is credit up to 10% of the purchase price, so any amount over a $75,000 purchase would not be part of the program. Have you seen a lot of homes for less than $75,000 in your market?
Second, it is a tax credit, not a grant. It has to be repaid. In the initial year, if someone’s tax liability is not at least $7,500, they only get to realize the credit up to that amount.
Beginning in year two, the new homeowner has a tax liability of $500 to begin repaying the loan. Years 3, 4, 5 – same thing. If they sell the home, the entire balance is due in that tax year.
Sounds a lot like a student loan. Doesn’t sound much like a stimulus – unless you’re an accountant.
We don’t need this bill – not now, not ever.
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For more information on my coaching services or sales tips visit my website stevehoffacker.com or my blog homesalesinsights.com.
And the Down payment assistance program is being eliminated making it difficult for many first time home buyer to buy in this market
thanks for the post Steve.
I agree with you...this will accomplish nothing, just headlines
Keji,
I believe that Congress thinks that if they appear to throw enough $$$$ at something that we'll be impressed. You're right, and thanks.
Steve
Eric,
You sure are right about the headlines. What amazes me is the number of people and organizations that are behind this bill when they must know that, aside from what they stand to gain, there is little in it for the home purchaser.
Steve
Interesting info. I had not read up on this but it doesn't sound like a good deal!
Gary,
We were lead down a rosy path with all the talk of how good this bill was supposed to be. Now that it's here, it fell very short.
Steve
Steve, I can say I need to do some more research, but at first glance, it sounds okay, but I think the extra digging will reverse that initial thought. The other issue is a tax credit is not the same as a down payment, so it will be interesting to see how it is applied to the purchase price. Is it a credit on the HUD? Is it supoosed to help with closing costs? Is it actual down payment? I am not sold
Bo
Bo,
It appears there is an income qualification as well - $75,000 modified adjusted gross income for singles and double that for marrieds. There are many, many stipulations. Just found this website to take a look at www.federalhousingtaxcredit.com. Looks like it is strictly a tax credit and does not come off the purchase price.
Steve
Steve, nice! And behind curtain #1, oops empty too. Why not, it's the government.
Duane,
Thanks. And now the entertainment really starts as I read where Bush signed this package today.
Steve
Steve, oh yeah, why not...they do keep it interesting.
Duane,
Get your popcorn and peanuts, I think the juggling acts are about to begin. :)
Steve
Steve, good one. I don't think I nned the nuts, they're already here. Grin.
Duane,
You got me, right you are with the nuts. The dog and pony show and the clowns have already been on. Wonder what's next?
Steve
Steve, may be the Big Top...pling of the lower price homes as a benefit.
Doesn't sound too good to me, not much of a tax break if you have to repay it, is it? Check out my blog today, I posted on the housing bill too, but a different aspect of it. I'd love to hear your thoughts!
Duane,
I just don't get it and I'm all out of metaphors for the moment. It's funny watching Congress spin its whee;s - it's good at that - but it's sad for all the people who really thought this would be something.
Steve
Carey,
I will definitely read your post. How does the promise of a $7,500 credit that you don't get til next year and then have to repay it anyway cause someone to buy a house now? I don't get it.
Steve
Steve - It worries me how GOVT just wants to throw "our" money at every problem they perceive we have; usually problems created by them and big business special interests in the first place. What I really want is for them to keep their stinking hands out of my pockets and let me decide what's good for me. I became a US citizen in 1986 (originally from Montreal) and was so happy to be part of the process. Over the years, I'm afraid my cynicism has gotten pretty bad. I just don't believe a word they say, who does???
Gail,
You really don't want to get me started on this so I'll just say that Congressmen (Senators are a little different) are always running for office. They're always campaigning. They're always trying to court votes. They're never more than 2 years from their next election. Makes it kind of hard to do the job the were elected to do.
Steve