Should the Government Extend the Home Buyer’s Credit – Weighing the Significance of this Incentive
Real estate is an ailing industry that needs to be revived and re-build after undergoing several catastrophic events. The massive and debilitating impact of the subprime crisis and the global economic downturn are factors why there is a dramatic downfall of this sector. The financial incentives regulated by the federal government such as the first time home buyer's credit has made a major impact in the entire system of home buying and real estate. There is however certain limitations with this tax credit given to potential and qualified home buyers. These known boundaries are the very reason why congressional leaders and the White House are pursuing its extension and even expansion of the salient terms and conditions included in the said tax incentive.
What is this tax credit that the government is working to extend?
To know whether or not the government should extend the home buyer's credit, it is important to refresh yourself regarding the different benefits home buyers are entitled to receive if found eligible to qualify for the credit.
- An $8,000 tax incentive or 10% of the entire property price will be given to eligible applicants, whichever amount is higher. This is given only to first time home buyers who are prioritized by the government for financial assistance.
- First time buyers defined in lieu with this incentive are those who are going to buy their very first house. It is extended to home buyers who have not acquired any property in the last three years. Thus, even if you have already purchased a house before, if you have sold it and preferred rental alternatives in the past three years without home acquisitions, you are still entitled of the tax credit.
- Individual tax payers who have $75,000 income and married couples who opt for joint application for home purchase and have not more than $150,000 income is also qualified for this option. Income requirement is necessary and is considered strictly by the government for basis of the credit approval.
- Home buyers who purchase a house for the purpose of making it their primary residence and own the house for the next three consecutive years are given the chance to enjoy the incentive. For home buyers who however chose to sell the house before completing the three years requirement are obliged to return the tax credit they have received.
Hence, with all the financial assistance that the first time home buyer stimulus plan has to offer, it is imperative that government authorities ensure the approval of the extension of the said benefit. Furthermore, a more elaborative suggestion to expand the credit to be given is also initiated. For most home buyers, this is a very helpful and worthwhile compensation that they can take advantage.
Home buyers as well as the real estate sector are truly fortunate entities in the society given the different financial assistance provided by the federal government. Furthermore, with the proposal of extending this stimulus plan creates a more optimistic future for the recovery of this important sector in the society.
