I know I took advantage of it. It was really conincidental that I was looking to buy my first place when the credit became available. I priced it into the house (and hope that the homeowners did not, but I really can't know if my realtor told theirs that I was a first time buyer; I hope not), and since I didn't think that home prices had fallen enough, it was helpful.
That said, the program is really (like the tax breaks for mortgage interes) a payout to people sufficiently well off to buy/own a house and that don't really need it. Moreover, it becomes counterproductive if it applies to everyone rather than just first time buyers as it looks like it will.
Tax credits/breaks for homeowners artificially raise the price of housing (much like low interest rates). This is not so much a problem if it only applies to a small subset of potential buyers (like first timers or people in the bottom one or two tax brackets or--and I know this would piss a lot of folks off--minorities). When it applies to all homeowners, however, every sale price gets to be bumped by some amount--in this case the whole price of the credit.
Encouraging home ownership is not really bad, but I don't think it much needs encouragement either, and if all the tax code is really doing is encouraging higher home prices, it should be abandoned. I don't want my house to go down in value but it won't bother me much if it does. Prices are currently (still) too high.
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