›

First time homebuyer? Uncle Sam sez DON'T BUY YET!!!

RobroyRobroy
edited July 2008 in Housing Bubble
First the economic stimulous. Now the housing stimulous.

Check out this federal housing bill:
http://blog.mlive.com/getting_in_your_b ... hback.html

And lookee here from the article: "...it also includes a $7,500 tax credit for first-time home buyers..."

This, in effect, means the fed will GIVE YOU $7,500 to buy a house, once the bill is passed. Seems like a good deal, assuming home prices don't continue to drop. ;)

I wouldn't take the bait in Seattle or Miami, but in Podunk, Kentucky, (or SD, or Kansas, et-al) where a McMansion on a few acres goes for less than $200,000, this is incredible! And they don't even really have a housing bubble to speak of.

This is really quite incredible and seems, on the surface at least, to be pretty darned desparate.

Comments

  • MarkorMarkor
    Of course only a small percentage of that $7500 will be realized, since it just reduces the income on which taxes are paid.

    Still, it's a giveaway, effectively a tax cut. The answer to everything now is borrow more money from future generations. It'll be paid back in spades via inflation, by most of us unfortunately.
  • RobroyRobroy
    Markor wrote:
    Of course only a small percentage of that $7500 will be realized, since it just reduces the income on which taxes are paid.
    No. It is not tax deductible. It is a tax credit! After computing your total tax due, you take the $7,500 right off the top.
  • MarkorMarkor
    You're right. Looks like house prices are going up by $7500.
  • RobroyRobroy
    Markor wrote:
    You're right. Looks like house prices are going up by $7500.
    Relatively speaking, yup.
  • jonjon
    At least they aren't paying builders not to build houses. Yet.
  • RobroyRobroy
    jon wrote:
    At least they aren't paying builders not to build houses. Yet.
    Y'know, the fed gov only has so much power. My opinion is that this whole thing is bigger than "them". Time will tell, of course. I will say that if they start dropping money from helicopters I will know it is definitely time to become a survivalist.
  • laxtosnocolaxtosnoco
    Some sources are reporting that the tax 'credit' is really a loan. For example, according to CNN http://money.cnn.com/2008/07/23/news/economy/housing_bill/?postversion=2008072312 the $7500 credit would have to be paid back in equal installments over 15 years.

    I imagine buyers would still use the credit, but the effect would be less if it's not truly a grant/gift.
  • RobroyRobroy
    laxtosnoco wrote:
    Some sources are reporting that the tax 'credit' is really a loan. For example, according to CNN http://money.cnn.com/2008/07/23/news/economy/housing_bill/?postversion=2008072312 the $7500 credit would have to be paid back in equal installments over 15 years.

    I imagine buyers would still use the credit, but the effect would be less if it's not truly a grant/gift.
    I'll say! This is ridiculous "newspeak". Kinda like giving a "tax rebate" to people that didn't actually pay tax.
  • garthgarth
    You can read the bill:

    http://www.speaker.gov/legislation?id=0235
    Gives first-time homebuyers a refundable tax credit that works like an interest-free loan of up to $7,500 (to be paid back over 15 years) to spur home buying and stabilize the market. The credit will begin to phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return).
  • RobroyRobroy
    garth wrote:
    You can read the bill:

    http://www.speaker.gov/legislation?id=0235
    Gives first-time homebuyers a refundable tax credit that works like an interest-free loan of up to $7,500 (to be paid back over 15 years) to spur home buying and stabilize the market. The credit will begin to phase out for taxpayers with adjusted gross income in excess of $75,000 ($150,000 in the case of a joint return).
    A tax credit is not a loan and a loan is not a tax credit. What we have here is genuine, 14 carat newspeak.
  • AlanAlan
    Maybe it is a reverse tax credit. You get the money when you buy the house but you have to pay it back when you file your Federal return.
  • RobroyRobroy
    Alan wrote:
    Maybe it is a reverse tax credit. You get the money when you buy the house but you have to pay it back when you file your Federal return.
    Plus penalties. :lol:
Sign In or Register to comment.