Our own Senator Bill Nelson, Florida Democrat, said recently that money saved by eliminating congressional earmarks should be used for another Homebuyers Tax Credit for another boost in home sales for 2011. 2010’s $8,000 tax credit for qualified first-time homebuyers and a $6,500 credit for repeat homebuyers seemed to help stimulate a lackluster housing market, and according to FloridaRealtors.org, was widely credited with the six percent jump in home sales – and the 42 percent increase in new home sales experienced this year.
According to the Florida Realtor article: “Restoring the tax credit would mean jobs selling, financing, and building homes and all the things that go in homes, Nelson said, adding that he’ll file legislation to reinstate the credit for 2011.”
“But, it will carry a price tag,” Nelson said. “If the Senate’s going to vote to ban so-called earmarks, which you’ve probably heard much about, then I think we should take the money that would otherwise be spent on lawmakers’ projects and use it to pay for the homebuyer tax credit. …If my colleagues in Washington are serious about banning earmarks, instead let’s put the money into the pockets of homebuyers.”
What do you think? Will we see another homebuyer tax credit and is this what Florida needs? As a Realtor, I am on the fence. While I do think it helped sales, I also heard about some unwise buyers who bought a home just because of the tax credit (not my buyers thankfully!) and now feel stuck in a home they do not love because they will have to pay back the credit. On the other hand, I had a couple who were first time buyers put in an entire new IKEA kitchen with granite countertops and stainless appliances with their $8,000 in their new home. In any case, one should never buy a home just because of a free $8,000 from the government (your closing costs probably exceeded that anyway!) However, if that $8,000 makes it easier to buy a home or do some remodeling that they were planning on doing anyway – then its great, and does stimulate the housing economy, as well as the retail and service/construction markets.