There are so many people looking to buy homes — some families are deciding to move because of lifestyle changes brought on by COVID-19, while others are simply looking to buy as they get married and have kids.
Veteran real-estate economist Ralph McLaughlin doesn’t mince words in describing how challenging this market is. In a recent blog post, he outlined how changes to the capital gains tax could make it a “carrot” to lure sellers into the market, while at the same time benefiting first-time buyers. Under his approach, the capital gains tax would be exempted for property sellers, especially real-estate investors, if they specifically sell the home to a first-time buyer.
The carrot vs. the stick McLaughlin’s vision differs significantly from the tax policies President Joe Biden proposed last month to pay for his broader economic agenda. “There was concern of negative effects on high-cost markets, but these seem to have been overcome by the more important supply and demand dynamics,” Tendayi Kapfidze, chief economist at LendingTree, told MarketWatch.
While the $15,000 tax credit did not ultimately form part of the recent economic plans the White House has rolled out, Democratic lawmakers in Congress have run with the idea. Reps. Earl Blumenauer and Jimmy Panetta, both Democrats, last week introduced the “First-Time Homebuyer Act.” “We need to do more to create opportunities for those who’ve been locked out of homeownership by creating incentives for first-time homebuyers,” Blumenauer, who represents Oregon’s 3rd district, said in announcing the bill.