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Fight Looming On Tax Break To Buy Houses

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http://www.nytimes.com/2009/09/16/business...ml?ref=business

When Congress passed an $8,000 tax credit for first-time home buyers last winter, it was intended as a dose of shock therapy during a crisis. Now the question is becoming whether the housing market can function without it.

As many as 40 percent of all home buyers this year will qualify for the credit. It is on track to cost the government $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February.

In the view of the real estate industry and some economists, all that money is well spent. They contend the credit is doing what it was meant to do, encouraging a recovery in the housing market that is gathering steam. Analysts say the credit is directly responsible for several hundred thousand home sales.

Skeptics argue that most of the money is going to people who would have bought a home anyway. And they contend that unless it is allowed to expire on schedule in late November, the tax credit is likely to become one more expensive government program that refuses to die.

The real estate industry, including the powerful 1.1 million-member National Association of Realtors, wants Congress to extend the credit at least through next summer. The group hopes to expand the program to $15,000 and to allow all buyers, not just those who have been out of the market for at least three years, to qualify. The price tag on that plan: $50 billion to $100 billion.

Joseph and Chassity Myers are among the two million buyers eligible for the credit this year. The newlyweds heard they could get money from the government for something they were tempted to do anyway.

“It was a no-brainer,†said Mr. Myers, a commercial underwriter. “Owning something is the American family dream.â€

The couple bought a two-bedroom condominium here in the spring for $171,000 and amended their 2008 taxes immediately, receiving their windfall by direct deposit a few weeks later.

Their home is now a monument to the government’s generosity. They bought a leather couch, a kitchen table, a bed, television stand, china cabinet, kitchen table, coffee table, grill and patio set.

Lets have more subsidy or more radically reduce the prices and get rid of the subsidy?

Nah I say lets have more taxpayer subsidy, why stop at $15k why not make it $50K and really get the housing market moving?

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You might not remember but for many years the British Govt. and therefore the British taxpayer funded part of an owner's house purchase through the MIRAS scheme. It was essentially a tax break on a householder's mortgage interest payments.

This was withdrawn in the 90's and replaced not long afterwards by new laws that made BTL very easy and gave, not householders, but landlords tax breaks on interest payments instead!

Nice....

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