Connecticut Select Homes | Fairfield County CT Real Estate

The $8,000 tax credit for first time home buyers was initiated last winter as a boost for sluggish home sales. It was meant to stimulate and create something like shock therapy during a crisis. Now there is a debate in Congress and throughout the industry whether the credit, which is due to expire this December 1^st, ought to be extended through the summer months.

Proponents of the bill argue that the credit has done exactly what it was intended to do, stimulate home sales. They claim the money was well spent. As many as 40 percent of home buyers this year will qualify for the credit. Analysts predict that the credit is directly responsible for several hundreds of thousands of home sales. It is estimated to cost the government $15 billion, more than twice the estimated cost.

Critics argue that most of the home sales would have happened regardless of the bill and their worry is that it will become yet another expensive government program that will refuse to die.

The ever present National Association of Realtors with nearly one million members is lobbying to not only increase the time limit on the tax credit, but also to increase the amount of the credit to $15,000 and to broaden it’s reach to all home buyers. The price tag for this, $50 to $100 billion. Economists are sharply split on this issue. Some economist think this is a good idea and will further stimulate the housing market, while others think it is just handing out money that we do not have to buyers who would be buying anyways.

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