Everard Kort…, Real Estate Pro in Lancaster, PA

What do you think about the stimulus plan with the 10 % of the purchase price with a max.$ 15,000 tax credit

Asked by Everard Korthals, Lancaster, PA Sun Feb 8, 2009

The real issue is : What do you think about subsidizing the low end of the primary home market. Do we have to entice renters to go out and buy homes or should we aim at people with higher incomes to buy the more expensive homes that are now lingering on the market or entice them buy a second home of which there is a large over supply.
The low income population does not pay much tax and might never get to the $ 15,000 even if they can spread it over 2 years.

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Why are some of you saying this is only for FIRST TIME homebuyers? I never read that anywhere.
0 votes Thank Flag Link Thu Feb 19, 2009
After reading some more info about it ,It all comes out in drips and drabs,It looks like the situation is as follows.The max tax credit is mentioned to be $ 15,000, that could mean approx.a $50 ,000 tax deduction or 10 % of a $ 500,000 house for some one in the 35% tax bracket,This sound reasonnable to me.Some one buying early in 2009 with a 80 % mortgage on a $ 500,000 house @ 6% could deduct $ 74,000 from the taxable income in 2009. Now they should open that possibility for the buyers of a second home as well.
0 votes Thank Flag Link Mon Feb 9, 2009
Many of my clients that recently purchased their first homes are planning on taking advantage of the tax credit. However I have not seen the tax credit entice anyone to buy a home. They are not recieving the credit until they file their taxes so it did not help them purchase their home. I believe most are planning on using some of the money on their new home and appliances but they are aware that the money is really just an interest free loan and they will be paying the money back over the next 10 years. I do not see the tax credit increasing home sales. It just seems to be a bonus for the recent first time homebuyers.
0 votes Thank Flag Link Sun Feb 8, 2009
It will increase home sales and is not directed at the low income population. Much better than the 7,500 'loan' credit they gov. gave last year. Research the upper income level maximums for the tax credit. I believe its well over 100,000 for couples. I don't call that lower income. It will give a push to younger people looking to buy their primary residence who might now be 'on the fence'.
0 votes Thank Flag Link Sun Feb 8, 2009
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