Tax break, tax credit, or whatever the hell they call it…free money to me. Don’t get me wrong, I’m all for free money as long as it doesn’t come out of my own pocket. In this case, it is coming from all of our pockets.
The proposal would allow a tax credit of 10 percent of the value of new or existing residences, up to a $15,000 limit. Current law provides for a $7,500 tax break but only for first-time homebuyers.
Isakson’s office said the proposal would cost the government an estimated $19 billion.
I normally stay away from politics on this blog, but somehow this story irks me. I believe it will only apply for first time buyers on new or existing homes. I can imagine so many scenarios how this can be taken advantage of.
- Buy a foreclosure house around $150K. You get your $15K, hence this would only cost you $135K. Take a few months to fix it up, then rent it out or sell it. Your house now should be way more than $135K. I’m positively sure you going to make money doing this.
- Easy flip – If you have $150K in the bank, buy it straight up without any loans and fees. This is like 10% off in a buyer’s market. Sell it as soon as possible after the $15K credit. I doubt you will lose money on this.