Update on the "Stimulus" Bill

I know there will be some that view home buyer tax credit as a positive, but I view it as a major disappointment. Part of the recent “stimulus” bill President Obama just signed included a reduced tax credit for first-time home buyers. The amount of the tax credit is the lesser of 10% of the cost of the home or $8000 (Georgia Senator Isakson’s limit was $22,000). This will do zilch to stimulate Buckhead’s, and the surrounding areas like Sandy Springs’ and Dunwoody’s, housing market.

There are some conditions:.
- You must be a first-time home buyer
- The property must be your primary residence
- You are eligible for the entire credit if your adjusted gross income is at or below $75,000 (individually) or $150,000 (filing jointly). If your gross income is between $75,000-95,000 (individually) or $150,000-170,000 (filing jointly), you may not receive the entire credit. Should your adjusted gross income exceed $95,000 (individually) or $170,000 (filing jointly)you are not eligible for this credit.
- You must remain in the home for at least 3 years. If the home is sold within 3 years of the purchase, the entire amount of the credit is recaptured on the sale.

Our own Georgia Senator Johnny Isakson had an amendment for up to a $22,000 tax credit and whether it’s your first, second or third home was irrelevant.

Apparently the possible $22,000 credit was demagogued into a special break for the “rich”; the credit was based on 10% of the purchase price of the home up to $22,000. I don’t know about you, but 10% of a $220,000 house isn’t exactly a special break for the “rich”, especially in Buckhead and metro Atlanta. It seems the new administration is more concerned about a warped perception of socioeconomic fairness than trying to actually stimulate the housing market. It’s going to take more than first time homebuyers in the sub $100,000 range to pull us out of the housing slump. We shouldn’t be particularly concerned about what special class of citizen is doing the purchasing. It might even be a family, with a newborn child, that is buying a larger and more expensive $220,000 home.

Isakson’s amendment was one of the few aspects of the “stimulus” bill that I actually thought might stimulate something.

Related posts:

1. Housing Stimulus Plan
2. Streets of Buckhead Update
3. Georgia homebuyer tax credit
4. Stimulation of housing?
5. Interview with Atlanta Home Architect Bill Baker