First Time Home Buyer Tax Credit Extension Thoughts

If you want to hit me, punch here. I’m numb and can’t feel it anyway.

As we talked about yesterday, the $8,000 first time home buyer tax credit is extended, and that even existing owners who buy will be able to get $6,500. The new requirements – signed purchase agreement by April 30, 2010 and house closed by June 30.

How do you feel about that?

The Cost

Before you answer, here are some interesting facts:

Extending the home buyer tax credit will cost $11 billion.
It will further lure home buyers to purchase, some of which shouldn’t be buying in the first place.
Many cities in the country are STILL overpriced. When you give incentives to fuel housing prices at already inflated levels, you are actually lowering everyone’s standard of living by strapping them into a HUGE mortgage payment. What does everyone have against renting anyway?

Nothing is one sided of course. Here are some people who will benefit.

Realtors – It’s a no brainer for them. It’s no wonder that the National Realtor Association were pushing heavily for congress to extend this credit.
Tax Accountants – More questions and complexity simply means more ways for them to charge.
Politicians – Extending the credit gets you VOTES. The U.S. House of Representatives passed the extensions by a landslide margin (votes: 403 vs 12).

Honorable mentions: Movers, furniture stores, and utility companies for charging you setup fees by clicking a few buttons on their screens etc.

What Do You Think?

These tax credits take money from the left pocket and puts it in the right. Sure, it sounds like there are no consequences, until you realize the time involved in the activity and the fact that you drop and lose some of it every time you tinker with your money.

I am not in favor of the home buyers extension, even though I may end up getting $8,000 because of it. How do you feel about it? Would you have voted yes if you had the choice?

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