Uncle Sam Wants You to Move
by Vera H-C ChanNov 5, 2009
Uncle Sam will give you the credit, but you'll have to pack your own moving boxes.
Hopeful renters longing for their own roof have been tracking the progress of the "8000 tax credit housing" (up 312% in Yahoo! searches on the Web) and "tax credit extension" (+50%). The "tax man" is feeling generous these days — Congress seems set on extending the credit beyond the Nov. 30 deadline and expanding the pool of qualified applicants.
That's not the only gimme. Homeowners who have been stuck in their digs for at least five years are being dangled a so-called "move-up" credit. Searches on Yahoo! for "6500 tax credit" have been busting out since the news broke.
Of course, not everyone is sold on those credits for first-time homebuyers (or people purchasing for the first time in three years). Some argue that the free money just subsidizes the real estate industry, since it keeps home prices inflated. Others say the 1.4 million households who cashed in probably would have bought their homes anyway. A Goldman Sachs analyst crunched numbers and said the first-time credit extension would probably only up sales by a miserly one percent.
During the first-time rush to own, observers complained that those move-up buyers—usually 80% of home-shoppers — were missing in action.
Incidentally, Congress might be tempted to fill more holiday gift baskets with Uncle Sam bonuses: A bundle of Bush-era tax credits are set to expire, which — as Forbes points out — puts the politicos between the rock ("fiscal responsibility" to deal with the deficit) and a hard place (hard-up voters).