Illinois Congresswoman Makes The Right Call: Pushes For Homebuyer Tax Credit Expansion
October 19th, 2009 categories: Economic Recovery, Housing Market, Mortgage Info, Real Estate News, Taxes
The first-time homebuyer tax credit has been one of the federal government’s more successful efforts to boost the nation’s economy. The $8,000 tax credit has inspired many first-time buyers to enter the housing market.
And across the country, including in Chicago, these first-time buyers have helped spur a steady rise in the sale of condominiums and single-family homes.
There’s a downside to the tax credit, though: It’s not permanent. It’s scheduled to expire on Nov. 30 at midnight. This means that buyers have to close on their mortgage loans by that time to qualify for the credit. In fact, because it can take so long to close a home sale, most buyers today are already excluded from the credit.
Members of the real estate community are lobbying politicians to make the tax credit permanent. This would help keep the nation’s housing recovery going strong, they argue. I agree: The tax credit has already had a tremendously positive influence on my market in Chicago and in many others across the country. Why not extend it?
Fortunately, some politicians agree. One of them even happens to be from Illinois. U.S. Rep. Judy Biggert, R-Ill., recently introduced legislation that, if approved, will extend the first-time homebuyer tax credit for six months. She has also introduced a second bill that would extend the credit for a year. That bill would also open the credit up to buyers who have bought a home before and would boost the maximum amount of the credit to $15,000.
Raising the maximum amount to $15,000 would be a great benefit to Chicago. That’s because Chicago housing prices are fairly high when compared to other markets. Simply put, an $8,000 tax credit in Chicago doesn’t go as far as one in Omaha or Topeka. But a $15,000 tax credit is significant even in the city.
The only improvement that I’d make to Biggert’s bill is that the tax credit should be made permanent. This would provide a constant incentive to buyers who might be waffling on entering the housing market. And the more buyers the tax credit persuades to enter the market, the sooner home sales will again provide a boon to the country’s still struggling economy.
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