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news
Joined: 14 Jul 2007
Posts: 0
Location: Greater Boston
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Renting in Mass
Joined: 26 Jun 2008
Posts: 381
Location: In a house I bought in December 2011
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 Posted: Thu Jul 31, 2008 3:39 pm GMT Post subject: |
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| I was really excited when I read about a credit for 10% of the value of the house, less excited when I read that the max was $7500, and not excited at all when I figured out the difference between a tax credit and a tax rebate. |
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admin
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Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Thu Jul 31, 2008 3:53 pm GMT Post subject: |
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| Renting in Mass wrote: | | I was really excited when I read about a credit for 10% of the value of the house, less excited when I read that the max was $7500, and not excited at all when I figured out the difference between a tax credit and a tax rebate. |
Be even less excited by the fact that you apparently need to pay it back. I guess it's at least an interest free loan, but the value doesn't really seem to be that high.
In my opinion, the real estate industry already has way more than enough corporate welfare in terms of laws encouraging home ownership. We need less of this, not more. I expect that most home-buying incentives simply serve to push prices up even more since you're bidding against others in the same situation. It's an ironic effect given that they are supposedly made to help affordability (in reality, the real estate industry is the largest lobbying group in the US, if I remember correctly - they are the true beneficiaries). At least this new incentive is mostly useless.
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balor123
Joined: 08 Mar 2008
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| Posted: Thu Jul 31, 2008 4:51 pm GMT Post subject: |
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| That's only true in Boston, where affordability is limited by housing supply. In other parts of the country, tax incentives encourages more home building. If politicians want to make housing more affordable in Boston, then they need to allow development on more land and higher density development. Since that won't happen, this new incentive will, in effect, just transfer money from all tax payers to homeowners, which primarily hurts non-homeowners. It's ironic, too, because the benefit is intended to help non-homeowners! |
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admin
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| Posted: Thu Jul 31, 2008 5:26 pm GMT Post subject: |
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| balor123 wrote: | | That's only true in Boston, where affordability is limited by housing supply. In other parts of the country, tax incentives encourages more home building. If politicians want to make housing more affordable in Boston, then they need to allow development on more land and higher density development. Since that won't happen, this new incentive will, in effect, just transfer money from all tax payers to homeowners, which primarily hurts non-homeowners. It's ironic, too, because the benefit is intended to help non-homeowners! |
Point taken. Even if new construction is a possibility, it would still raise the prices somewhat since it would raise the demand curve, but you're probably right that the bulk of the incentive wouldn't be swallowed up by higher prices in that case as it would in somewhere like Boston.
I have to wonder if the legislators actually believe that the incentives help non-homeowners or if they understand the economics and are just using that as a smokescreen.
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