Refinancing tax low-income break (Concord: credit card, loans, house)

[seamusnh]

According to yesterday's NH Sunday News, the refinancing tax is still being considered and it will have a break for the elderly and for low-income homeowners. Doesn't that seem odd to have a tax break for low-income home owners? If you own a home, your aren't exactly poor and are better off than people who rent...

If the tax reduction is based on income, then it is partially an income tax....

[lisa g]

[quote=seamusnh;9300708]Doesn't that seem odd to have a tax break for low-income home owners?

Yes!

And I hear you on it being an income tax of sorts as well.

[BF66389]

This is such a bad idea for NH; even if you support increasing tax revenue in some way...this is NOT the way to go about doing it.

[OCCASparky]

Here's a wild idea--how about not having it at all? How about spending within your means, Concord? We cut back. So should you.

[sgthoskins]

Originally Posted by OCCASparky

Here's a wild idea--how about not having it at all? How about spending within your means, Concord? We cut back. So should you.

It's a simple and correct concept. Sadly those in power don't want to hear it.

[NH2008]

I don't know anything about this particular revision but attempts to thwart the market always have unintended consequences. Think about Prop 13 in California.

[BF66389]

Originally Posted by NH2008

I don't know anything about this particular revision but attempts to thwart the market always have unintended consequences. Think about Prop 13 in California.

You know the "transfer tax" when you purchased your home? Essentially they want to apply it to refinancing as well and reduce the level of both.

However, the proposed reduction isn't enough to result in a net reduction of the tax burden.

It may sound worthwhile to reduce the 1.5% transfer tax to 1% and then apply it to refinancing as well "hey, when I buy my house I save .5% vs. the old system"; but if you refinance once, you've now paid 2% as opposed to 1.5% net.

Given the bustle of refinancing activity now; all sorts of not a good idea as paying an exta 1% in closing costs could easily be a dealbreaker for most. Even a worse idea economically given that *usually* what a family saves by refinancing is then spent on good/services...

[seamusnh]

If this happens, the number of refinancings will decrease and the poltiticians will probably wonder why..... To me this smacks of "tax anything that moves". When you are refinancing, you are simply buying a better loan. It is like transfering a balance from one credit card to another one with a lower rate.

[Valerie C]

Don't let our state "leaders" hear you compare it this way! Mine can't be the only credit card that charges a 3% "transfer fee" when they make those "special offers" to transfer to a lower rate... sometimes it's the better deal even with the 3%, but not always...

Originally Posted by seamusnh

When you are refinancing, you are simply buying a better loan. It is like transfering a balance from one credit card to another one with a lower rate.

[OCCASparky]

So what's next? Get a cash advance and pay an extra 1% to the state? Ditto with signature loans? Bumming $20 from your buddy until payday?

While the above SOUND ridiculous, so is taxing a refi. Even if one is cashing out (doubtful given declining home values), all this will do is further damage any chances for a timely recovery in our economy, but of course since Concord can't control their spending habits, someone has to pay for it, right?