Home Buyer Tax Credit: Do You Qualify, Will it Help?by Tim Manni
Just one incentive amongst President Obama’s wide-ranging plan to fix the housing market, the New Home Buyer Tax Credit will provide first-time purchasers — between the first of January and the first of December 2009 — with $8,000. What started out as a $15,000 tax credit was reduced during the negotiation process between the House and Senate.
Luke Mullins of U.S. News & World Report put together a list of seven things you need to know about the tax credit, here is a sampling:
4. No payback: The good news for prospective homebuyers is that unlike a previously-enacted $7,500 tax credit, this one doesn’t have to be repaid. That makes the credit much more attractive from a would-be buyer’s prospective, says Keith Gumbinger of HSH Associates. “[It's a] more traditional sort of incentive,” he says.
6. Market impact: Gumbinger expects the measure to have only a modest impact on the housing market. That’s because it can’t do anything to address the weakening labor market, falling consumer confidence, or tightening lending standards that are working to prevent many would-be buyers from entering the market. “It certainly helps to serve an audience which can [already] participate in the market,” Gumbinger says. “But it doesn’t do anything to help to develop demand from those borrowers who are at the fringes–or far away from the fringes–of participating.”
Readers: What do you think of this program — will it have the impact on home buying lawmakers are hoping for? If you can qualify, does anyone plan on taking advantage of this incentive?