Home buyer tax credit: More details and a lot of angst
--As you probably already heard, the credit would be available to buyers signing contracts through April 30 and closing by June 30. First-timers would continue to be eligible for up to $8,000. Other buyers could get up to $6,500, starting Dec. 1, if they've lived in their current home for at least five years.
--Income limits would be increased to $125,000 for individuals and $225,000 for couples, with the credits phasing out above those amounts.
--Repeat buyers must be getting a primary residence, not a vacation or investment property. But you're allowed to keep your current home.
--Eyeing a home priced above $800,000? You can't get this credit, the senators say.
--Read their lips: No more credits for 4-year-olds. First-time buyer tax credit fraud, including money funneled to preschoolers and to people who didn't actually buy anything, prompted senators to require that buyers be at least 18 and submit copies of their HUD-1 settlement statements when applying for the credit.
News of this extension and expansion touched off a firestorm of discussion here, and emotions of all sorts. Hope among some homeowners who could use $6,500. Frustration among those who would miss out under the proposed restrictions. Aggravation among renters who think credits are artificially propping up the market at taxpayers' expense.
A nameless reader who's rooting for passage wrote: "I bought a house 5 years ago and now it's worth way less then what i owe."
Lee opined, "I think the 5 year requirement is a bit excessive and a little discriminatory ... Why not 3 or 4 years? What about those who have had to move most recently to keep their jobs?"
Chase, who is trying to buy his second home because he's more than 60 miles away from his job, bemoans the fact that he and his wife have only been in their first home 3 1/2 years. "I really wished this program, if approved, would allow for any second time home buyers that has not already participated in the 'first time home buyer tax credit', even if it was phased out based on how long you had owned your home. For example 5 years = 6500, 4 = 5500, 3 years = 4500, etc..."
Krista writes, "We are neither first time homebuyers nor do we currently own a home. We took a big hit when we relocated two years ago on our house that we sold. We are renters right now. So if you want to stimulate the economy we should get tax breaks before those who already own. Where do we fit in??"
Kevin R said these comments -- plus more along the same lines -- were making him feel nauseated. "Too many people looking for a handout," he wrote.
Jelena, who has been looking for a house for a while now, says she's against the proposal even though she could qualify as a first-time buyer. In her opinion, "this is just prolonging the agony. Now the prices won't fall (read - adjust to the realistic level) for another year or so, but they will fall after all the tricks end eventually. Sadly, we really have to move soon and, as a result of this credit, now we'll have to face higher prices and, possibly, bidding wars."
But Darwin Rules, who frequently predicts here that home prices in the Baltimore area will fall to 1999 levels, is unfazed: "The higher you fly, the harder you fall. I'll just sit back and wait a bit longer for the inevitable carnage - will be a bit more tenderized after the harder landing."
Many of the comments were negative -- either of the "where's mine?" or "stop wasting money" variety. But as of last night, 80 percent of the people taking the Wonk poll gave the proposal a thumbs up. Five percent more opted for a thumbs sideways.
Wherever you stand on the issue, you'll probably get a laugh out of semiconscious's tongue-in-cheek reaction: "The government should just give us all money to buy homes. ... In fact, we should get money for cars, clothes, vegas vacations and a couple of Gulfstream jets."