The National Association of Realtors (a.k.a NAR) has been going to Congress with data supporting their claim that the $7,500 first-time home buyer tax credit is a bust. I can’t say I’m surprised. From my experience, first-time buyers have a large enough learning curve and trying to educate them on the merits of a tax “credit” that isn’t a credit at all just doesn’t make sense. I also don’t see the purpose of adding another form of debt to the transaction. Folks are concerned enough with debt and adding more fuel to the fire doesn’t give my buyer clients a warm and fuzzy feeling.
NAR is asking for people to take action and support what they are calling the “First Key to Unlock the Housing Crisis”. They are hoping for the elimination of the repayment requirement, for the credit to be made available to all purchasers of a primary residence (not just first-time buyers), and for the program to be extended through 12.31.2009. I totally support this proposal and if the changes are put into place it might finally provide some real benefit to buyers AND sellers. Do you agree?
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I do agree, Jake! Repayment is definitely a drawback. I just watched President-elect Obama on ABC and hopefully his seemingly good policy reforms will have that positive effect on Congress and their decisions on issues like this one.
Does anyone know of a delay in the payment of the Tax Credit? I recently went to HR Block where they told me there might be up to a 3 month delay in payment from the IRS on the $7500 credit. I have chosen to take advantage of the credit and need the money since my husband has been out of work for over a month.
Hi Denise – I’m very sorry to hear about your husband. I’m not an accountant but I have been keeping up with this on the IRS website and others. In general, I don’t believe you will actually get a payment from the IRS unless you have very little or no money to claim on your 2008 taxes. For most folks this “credit” will simply offset money owed but I haven’t heard anything about the timing of actual checks being cut. I will keep my eye out.
Dear Jake,
Has there been any discussion of including all 2008 first-time homebuyers? Since this is a tax credit, (or 0% payback loan–whichever people prefer to call it), does it not seem fair, that despite the fact that this Act was signed in April of 2008, that it should have been passed to include all first-time buyers in the tax year? Has our new president expressed interest in including all who purchased in “08″, modifying the Act passed in the former administration? I’m sure many would agree that the housing crisis began prior to tax year beginning Jan. 1, 2008. Why would everyone not be included in this important legislation, and how do you recommend those who find themselves in exactly this situation lobby for some type of amendment to include them as well? I have contacted the office of Johnny Isakson, instrumental in amendments to this Act, and as a New York constituent, Charles Schumer my own state senator. Any other suggestions as to what may prove helpful in correcting this inequity?
Hi Kevin – Great questions and ones that are being asked/discussed in a lot of different places. So far I have not heard of any debate/discussions regarding an extension of the credit to previous buyers, but I will report back if I do. I actually just posted about ways for folks to lobby for themselves and what you have done already in contacting Senators Isakson and Schumer is probably your best bet. If you wanted to get your message out a little more, you might try touching base with folks at fixhousingfirst.com but I think at this point the Senate is going to go with what they’ve got and we’ll all have to see if some of our questions get answered during the next round.