Middle Tennessee realtor weighs in on Biden’s tax credit solution to housing
NASHVILLE, Tenn. (WKRN) — During Thursday night’s State of the Union, President Joe Biden said he would like to help first-time homebuyers and slow down the number of investors buying up single-family homes.
However, will Biden’s plan put a dent in Middle Tennessee’s housing affordability crisis? News 2 asked a local realtor that question.
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In front of what’s likely his largest TV audience before the November election, Biden said he wants two new tax credits to help Americans afford homes.
“I want to provide an annual tax credit that will give Americans $400 a month for the next two years, as mortgage rates come down, to put toward their mortgages when they buy their first home or trade up for a little more space,” Biden said his address on Thursday, March 7.
The first tax credit is $5,000 over two years for first-time homebuyers in the middle class.
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Jeff Checko, relocation director with the Ashton Real Estate Group of RE/MAX Advantage, said tax credits could be a help for some buyers to get into the game, but he called this solution a band-aid.
“The real solution is to get inflation under control in a real way, get supplies down on cost because of the natural supply and demand cycle, and get it so it’s cheaper for builders to deliver product where they can still make a margin without having to raise prices,” Checko explained.
The second tax credit is $10,000 for middle class families who sell their starter-home to an owner-occupant instead of an institutional investor. These investors have bought up a large number of single-family homes in recent decades turning them into rentals.
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Checko has seen firsthand how investors have changed the housing market. However, he doesn’t think $10,000 is enough money for everyday buyers to compete against well heeled investors.
“In some cases, yes, maybe at your lower price properties for your first-time homebuyers, you might see a real, like, tangible, like, ‘Hey, that’s great. Come tax time, I’m going to get that extra $10,000 for doing this,'” Checko said. “But, in the big picture, it’s not going to affect middle class and up type of housing because it’s really a small number.”
These tax credits are a proposal at this point. Biden would need Congress to sign on.
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