The Senate voted overwhelmingly Wednesday night to provide new home purchasers with the largest tax break of its kind ever in US history. The bill, designed to buoy the ailing US housing industry, provides a Federal Income Tax Credit to all home purchasers. Henceforth, 10% of the purchase price of their new home – with a cap of $15,000 – is a tax credit. That’s right, credit, not deduction. This is finally meaningful. Previous tax credits only benefited first-time buyers. Now, you can buy a $300,000 new home and save $15,000 in taxes. This is the same as the IRS providing you with a 5% down payment. No catch.
The bill is seen as a victory for Republicans eager to leave their mark on a mammoth economic stimulus bill at the heart of President Barack Obama’s recovery plan. The tax break was adopted without dissent and came on a day in which Obama pushed back pointedly against Republican critics of the legislation even as he reached across party lines to consider scaling back spending.
Cost of the Housing Stimulus portion of the mammoth economic stimulus package is estimated at a measly $19 billion. It’s not that I’m not appreciative, really, because I am. For selfish reasons, I am a homebuilder. From a selfless point of view (which, at the moment I am maintaining) many people have lost their homes in foreclosure and many more are faced with it, and they need some help. But when housing – the backbone of the American economy and way of life – only merits $19 billion in effort, when more than $1 trillion is being splashed around like so much water at Jones Beach in this spending package, it makes one wonder about the priorities our all knowing President and Congress seem to have. It also begs the question: Where in the hell are they spending the other $981 billion?
I know I sound insensitive and just downright critical, but think, this used to be alot of money.
Jeez, at our new Lexington Park at Rice Field neighborhood in Downtown Plano, the government providing 5% of your down payment while Lexington is providing 4.25% fixed rate mortgages for 30 years. I was going to say with only 5% down, but now it seems the government will pick up that cost for you. You can’t afford not to buy one! I’m buying one tomorrow.