Home Buying Tax Credit

Instead of extending the current tax credit, I propose giving Home Buying Tax Credit to those that own a home who would like to trade up or even downsize without placing a five year restriction on receiving the tax credit. My husband and I purchased our first home in the summer of 2006. The former owners received approximately 27% net gain at settlement and owned the home for merely two years. We have now owned our home three and a half years and will be lucky to break even after settlement costs. Every mortgage payment has been paid on time and even extra principal payments have been made. We recently had our first child this past June and would like to move to a single home. However, we do not qualify for a homebuyer tax credit. Homebuyer tax credits are being handed to those who have never owned a home and to those who have owned a home for the past five years. For example, a homeowner could own their home for the past five years and decide to keep their current property as an investment property and still qualify for the first-time homebuyer credit.

Why should a person that is making timely payments on their current mortgage be excluded from receiving the homebuyer tax credit; merely due to the fact that the home doesn’t meet the ownership criteria of being owned for the last five years out of the eight year period? In addition, I recommend going forward that the criteria for homebuyer programs be revised to include those that are current homebuyers with credit scores over seven hundred and fifty. However, for our economies sake, discontinuing the tax credit is in our best interest. The $8,000 tax credit per the reported 350,000 purchases (that would not have purchased if the tax credit was not available) will cost the nation approximately $16 billion. Personally, I am not interested in the nation incurring $16 billion more in debt in order to offer $8,000 or $6,500 tax credits. The $16 billion is more than double the amount that was originally anticipated when the stimulus package.