Tax Break for Homebuyers- What a “Stimulus”!!

Excerpted from The New York Times :-

By DAVID M. HERSZENHORN

 

Published: February 4, 2009

The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

Senator Johnny Isakson, Republican of Georgia, a former real estate broker who was the prime sponsor of the homebuyer credit, said it was modeled after a similar, $2,000 homebuyer credit that helped lead the country out of recession in 1975.“We do have a history in this country with housing and it goes back to the crash of 1974, which actually in terms of inventory and price declines was comparable to what’s happening now,” Mr. Isakson said at a news conference. “Within one year of the inception of that tax credit, two-thirds of the available inventory that was on the market was gone. The market moved back to a balanced inventory, values stabilized and things became very healthy. The only reason I know all of that is I was selling houses in 1974, that’s what I was doing to feed my family and make a living.”

The measure would give buyers a tax credit of 10 percent of the price of a primary residence purchased within the year, up to $15,000, and is designed to stabilize plummeting home prices that caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in losses on mortgage-backed assets.

 

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