Homebuyer Tax Credit Appears Close to Extension
An extension of the $8,000 federal tax credit for first-time homebuyers could be coming on the back of an unemployment-benefits measure.
Palm Coast, FL – October 28, 2009
By Brian Faler
Oct. 28 (Bloomberg) — A proposal to extend the $8,000 tax credit for first-time homebuyers as part of an unemployment- benefits measure has significant support, Senate Majority Leader Harry Reid said.
“There’s general agreement by a significant number of senators, Democrats and Republicans” for adding the tax credit to the measure extending unemployment benefits, Reid said today. The measure is being held up by Republican demands for votes on unrelated amendments, the Nevada Democrat said.
“Let’s get this done and we’ll move on,” Reid said.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, called the dispute an “unnecessary impasse.” Most lawmakers support the unemployment measure as well as the homebuyers’ credit, he said.
Toby’s Commentary: Clearly the first-time home buyer program was more successful than the automobile industry’s clunker program. The real estate and housing industry would surely benefit from an extension. In for a dime, in for a dollar. I am troubled however by the level of fraud that apparently has crept into the program. The Wall Street Journal reports that the IRS has discovered:
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19,000 filers who had not bought homes claimed $139 million in tax credits and were reimbursed
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Another 74,000 tax credit claims, valued at $500 million, are linked to previous home ownership
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More than 500 people under the age of 18, including a 4-year-old child, applied for the credit
Just as when the government made it easy to get mortgages, they created a target rich environment for fraudsters. The weakness in oversight WILL be exploited and honest people will have to pay to pick up the piece.
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Down Right Hypocritical
Clearly the first time home buyer program was successful.But the plan in my opinion falls short.What if a boat started sinking and you only allow 33% of the passengers to board life boats. Thats what the government did with its first time home buyer tax credit of $8000. Only about 33% of the real estate market accounts for first time buyers.Foreclosures affect all price ranges of the market.I guess its shark infested waters for the rest of us.