SEVEN SINS OF THE "UNFAIR" HOMEBUYER TAX CREDIT ?

The U.S. First Time Homebuyer Tax Credit offers up to $8,000 incentive for people to kick start the economy by buying homes. Today a leading real estate news service published an article that raises questions about the fairness. Let's take a look.

First, the Inman news service article reports an estimate that roughly 1.3 million households will be eligible and claim the credit, for a total government handout of roughly $8,800,000,000.

These are the "unfair" aspects mentioned in the article:

1. The credit is not needs-based (except for the cap on high income earners)
   
2. The "easy money" will tend to artificially inflate home prices
   
3. It will tempt home buyers to over-borrow against the "phantom equity"
   
4. It is a "hidden gift to lenders and investors" (who couldn't otherwise sell property)
   
5. It helps some buyers compete unfairly against innocent others.
   
6. It will tempt buyers in to home loans they will not be able to make payments on
   
7. It hands over our tax dollars to people who's random luck is to want to buy this year

We may or may not agree with these assertions. As a taxpayer, what do you think? If you're a First Time Homebuyer getting $8,000 free money, what do you think?

Posted by Lee Alley, www.BHhomes.INFO, Rapid City, Black Hills, SD at 3:30 PM

Labels: Financing