Since the beginning of 2009, first time homebuyers have benefited from an $8,000 gift directly from Uncle Sam. Qualifying for the gift was easy and thousands of people benefited.
As I write this, plans are in place to extend and modify the tax credit into next Spring (thank heavens), which will continue to help economic recovery for more folks than just those stepping up to purchase a home.
I’ve been amazed while hearing our various elected officials and economists speak shortsightedly, in my opinion, about why the tax credit should not be extended, nor should have been in place to begin with. I absolutely agree that the tax credit has a huge price tag. However, let’s think very briefly about what that tax credit is actually buying.
Just help buying a house? Hardly!
Think back to your last move, whether it was a house, an apartment, back to mom’s, wherever. What was the first thing you did? I can tell you what I did … picked up my wallet and headed straight to the store. I needed STUFF — boxes, moving supplies, shelf liner, paint, curtains, towels, furniture — STUFF!
That’s where the money goes. Not just in a pocket or frankly, not just back in a savings account. Is $8,000 too much? Did I buy $8,000 worth of stuff? Oh yes. And much more. Had I been given the $8,000 as a gift from my last move, my house credit card might not have been maxed out!