There have been extensive bailouts this past year and there could be more to come. Tax payers can not afford to keep throwing money at every problem. ELIMINATING CAPITAL GAINS ON ANY HOME UNDER $1 MILLION PURCHASED WITHIN THE NEXT 12 MONTHS for as long as they own the property will not require one more penny of tax payer's money and it will help set a floor on housing. This should be considered.
1. All buyers receive an investment tax credit equal to 10 percent of their down payment up to 20 percent down. These parameters could be of course modified but the concept would immediately create additional demand and help stabilize the decline in housing prices.
2. Demand drove prices up so increasing demand is part of the solution. An elimination of a capital gains tax on housing could cause many investors to reconsider real estate as a good investment by removing some of the risk in this uncertain marketplace. Since prices have adjusted downward and interest rates are quite attractive this one extra ingredient could move more buyers into buying even in those areas not as effected by foreclosures.
3. It will keep things from becoming worse and it will keep tax payers from continuing to bail out more bad loans and desperate companies.
4. The foreclosure market has attracted many buyers but other homeowners, not yet facing that burden, are in need of help to sell now. Eliminating the capital gains tax for purchases will cause investors and insecure buyers to see this as a unique buying opportunity with attractive future benefits. This will keep some distressed sellers from becoming another foreclosure statistic and from prices declining further.
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