$8000 Tax Credit Extended!!-for the military only

The House of Representatives unanimously passed a bill yesterday extending the $8,000 first time home buyer tax credit for members of the armed forces serving overseas. This is a 90 day extension. Clearly this is something that will also pass the Senate. It is too politically popular not to go through quickly. The problem is that this probably means that the $8000 tax credit for everyone else will expire.

I do not understand the thinking about this. It appears the tax credit worked. Since its inception, housing inventories nationwide have gone down from 9 months to 8 months. This tax credit has cost $15 billion. If it is extended for everyone, let us say it will cost another $15 billion for a grand total of $30 billion. That is a drop in the bucket compared to $770 billion dollar stimulus and this program has shown actual results.

However, if you are buying a property in New York State, there was and still is a tax credit program through the State of New York Mortgage Authority (SONYMA). You can use 20% of your Long Island mortgage interest or your mortgage interest anywhere in New York State as a direct tax credit and the other 80% can be used as a normal interest deduction. Unlike the federal program, this tax credit and deduction can be used year after year.

Let us hope the politicians come to their senses.