Home-Buyer Tax Credit Extension Gains Support

Senators agreed Wednesday to extend a popular tax credit for first-time home buyers and to offer a reduced credit to some repeat buyers.

The tax credit provides up to $8,000 to first-time home buyers but is set to expire at the end of November. The Commerce Department said Wednesday that new home sales fell 3.6% in September, and some industry representatives blamed uncertainty about the tax credit.

Senators agreed to extend the existing tax credit for first-time home buyers while offering a reduced credit of up to $6,500 to repeat buyers who have owned their current homes for at least five years, said Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.

The tax credits would be available to home buyers who sign sales agreements by the end of April. They would have until the end of June to close on their new homes, according to a summary of the legislation being circulated among lawmakers.

We’re happy to see this gaining support. Of all of the money that is being spent ‘stimulating’ the economy, the home-buyer tax credit get the most bang, for the buck. That being said, I don’t know that I agree with the notion of expending the credit beyond first time home-buyers. If current home-buyers capitalize on the credit, they are not contributing to the reduction of available homes on the market. They are just swapping one home for another. On the flip side, first-time home-buyers help reduce the inventory on the market, and thus help stabilize it.

via Senators agree to extend home-buyer tax credit – USATODAY.com.