Housing Stimulus Plan Reaction

February 10, 2009 12:23:45 AM PST
The President's economic stimulus plan includes a tax credit of up to $15 thousand for home buyers. Bob Keenan of the Tulare-Kings Homebuilders Association thinks it's a great idea. We're looking for it to stimulate the purchasing of not only newly constructed homes but the inventory that's existing now. Get things moving." Keenan said.But Republican Congressman Devin Nunes of Visalia conference doesn't think the tax credit goes far enough. "Do I think the 15 thousand dollar tax credit is a good thing? Yes. Do I think it will work? Probably not." Nunes said.

Nunes believes the tax break will sell some houses but thinks a Republican plan to lower interest rates for all mortgages, new and existing would be better. " I mean that is a big way to stimulate the economy because that's virtually free money. A 30 year note at 4 per cent. So that would be a much better deal." Nunes said.

The Republican plan has not passed the Senate, but the tax credit plan has, and is expected to win approval in the House in the coming week.

Under that plan a homebuyer could receive a tax credit of up to $15 thousand, or ten per cent of the homes purchase price, up to a price of $150 thousand. Another plan which is already in effect offering first time homebuyers a $7500 credit would be phased out. Unlike the lesser plan the ten per cent tax credit would apply to any homebuyer and would not have to be repaid.

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