Up to $15,000 tax credits may boost house sales up to 40%?

The rise of a tax credit from the present $8,000 to $15,000 for first time-time home purchasers is being called by lawmakers and businesses. In their view, this would positively affect the sale of houses and result in higher sales as up to 40% of house purchases are made by first-time home purchasers according to the National Association of Realtors. 

The present tax credit has been introduced as a stimulus to encourage the home buying in July of 2008 and has been expanded in February. A bill on keeping of an $8,000 tax credit until June 2010 and expansion of it to all home buyers in addition to a bill on expansion of the tax credit to $15,000 for any home buyer regardless of income have been introduced in the House of Representatives and the Senate respectively. 

Despite the tax credit’s contribution to the growth of house purchases, the proposals on raising the credit are expected to be met with criticism. CEOs of large companies advised Congress to expand the tax credit to $15,000 and to make it eligible to all home purchasers. Bernard Baumohl, an economist at the Economic Outlook Group, says that he is confident about Congress extending the tax credit. No immediate comments have been received from the White House on Sunday. 

It is worth noting that the current tax credit does not apply to singles earning more than $95,000 a year and couples who earn more than $170,000.