Read the original article by C. Eugene Steuerle on Tax Policy Center.
Democratic Presidential candidate Joe Biden has proposed a first-time homebuyer (or “down payment”) tax credit of up to $15,000. While details are sparse, the idea of a tax credit to help new homebuyers with their down payment makes good sense and is a significant improvement over today’s primary subsidy for homeowners—the mortgage interest deduction (MID). A version of the Biden tax credit proposal has been estimated by the Tax Policy Center to cost roughly $25 billion annually.
A tax credit for first-time homebuyers focuses on homeownership rather than the accumulation of mortgage debt. Such a credit would target subsidies to those who don’t yet own a home, including the young, who have struggled to build wealth. It also would benefit Blacks and Hispanics, who respectively have only one-eighth and one-fifth the average wealth of Whites…