The Homebuyer’s Credit expired on April 30, 2010, but a handful of politicians are working to reinstate it, fearing an extended real estate slump. While Harry Reid proposes extending the closing deadline on the most expired credit (all pending deals must close before June 30 to be eligible for the credit) to September 30, Ron Paul is proposing we make the credit permanent.
Critics argue that the credit was wildly expensive for taxpayers as a whole, and does little to stimulate real estate sales. Many say that those who took advantage of the credit would have purchased a home anyway, and the credit simply made them accelerate their purchase.
On the other hand, following the expiration of the credit, many real estate experts fear that the housing market will slump, causing a “recession double dip.” Of course, homeowners who claimed the credit were thrilled to receive up to $8,000 in free money from Uncle Sam. Add in that this in an election year; every politician is looking for ways to curry favor with voters, and this tax credit was very popular with taxpayers.
Read more about Reid’s proposal here, and see more about Paul’s proposal here.