The House of Representatives Ways and Means Committee approved a bill that would offer tax breaks to first-time home buyers. The proposal would allow first-time home buyers, within income limits, a refundable tax credit of up to $7,500 that would have to be repaid to the government over a period of fifteen years. The tax credit would be temporary, lasting just one year.
The proposed bill also would give taxpayers who do not itemize deductions on federal income tax return a new standard deduction for state and local property tax payments. Additionally, the bill would authorize a $10 billion increase in tax-exempt revenue bonds to provide loans to first-time home buyers and finance low-income rental housing construction.
The Senate will vote on its on version of the bill this week. The Senate version of the bill is more than twice as expensive as the House version, costing taxpayers $20 billion.
Neither version of the bill has been met with much enthusiasm by taxpayers, many of which consider it a case of throwing good money after bad.
What do you think? Should we provide a tax incentive for first-time home buyers? Will tax-based housing incentives make a difference in the economy?
