Archive for the ‘Homebuyer tax credit’ Category

Rethinking Homeownership Subsidies

Tax expenditures for homeownership, such as deductions for mortgage interest and property taxes and the partial exclusion for capital gains on the sale of a primary residence, have long been recognized as ineffective, regressive, and extraordinarily expensive—costing $121 billion in 2013 alone. Until now, most reforms—including the Bowles-Simpson deficit-reduction plan—have focused on restructuring the mortgage […]

What Changes in the Mortgage Deduction Would Mean for Home Prices

Tax preferences for housing are under fire, with mounting evidence that these preferences are inefficient, unequal, and too expensive to warrant a place in the tax code. Critics of proposed changes in the tax treatment of home ownership argue that these reforms would slash home prices at the very time they are showing signs of […]

Unearned Interest in the Homebuyer Tax Credit

Taxpayers who took the 2008 tax credit for new homebuyers were unhappy when Congress made the credit much more generous in 2009. People who bought homes in 2008 have to repay the $7,500 credit over 15 years. Those who bought in 2009 or 2010 don’t have to pay their credits back. It turns out that […]

The Homebuyer Tax Credit Land Rush

If your neighborhood is anything like mine, “under contract” signs are blossoming like dandelions. Many (of the signs, not the weeds) were very likely the result of the artificial land rush created by tomorrow's expiration of Homebuyer Tax Credit II. The credit gives $8,000 to first-time buyers and up to $6,500 to move-up buyers.

The Homebuyer Tax Credit: When Will They Ever Learn?

The early returns are coming in on the First-Time Homebuyer Tax Credit. And it appears to be a bigger boondoggle than even I thought it would be.
At a House Ways & Means Oversight subcommittee hearing today, the Internal Revenue Service inspector general reported that the IRS is auditing more than 100,000 of the roughly 1.4 million returns that included a claim for the credit. This is a staggering audit rate for an agency that usually reviews only about 1 percent of returns.