Local real estate professionals are praising a proposal in Congress to extend the $8,000 tax credit for first-time home buyers for another six months beyond its Dec. 1 expiration.
“It can do nothing but help,” Tom Stern, broker and sales manager for Doreen Ross Associates in Schenectady, said.
U.S. Sen. Kirsten Gillibrand announced Thursday she co-sponsored legislation to extend the federal stimulus program through May 2010. “These tax credits were the right step to help bring our housing market back from the brink, but now is not the time to let up,” the Democrat said.
More than 8,000 New Yorkers took advantage of the program through August this year, saving approximately $3.96 million, according to the U.S. Department of the Treasury.
The credit is for houses bought from Dec. 31, 2008, until Dec. 1, 2009, and can be taken either as an amendment to 2008 individual taxes or on 2009 taxes. The tax credit is for 10 percent of the home’s purchase price — up to $8,000 for a first-time home buyer. “First time” is defined as someone who has not owned a house for the previous three years.
Bethany Lesser of Gillibrand’s office said the goal is to have the extension in place “before mid-October. That way people can rely on it.” Beau Duffy of U.S. Rep. Paul Tonko’s office said the House has at least five different bills extending the legislation and will consider them this fall.
Jim Ader, chief executive officer for the Greater Capital Association of Realtors, said his organization supports extending the program beyond Dec. 1. “It is a valuable tool and should be extended if at all possible.”
The association on Thursday released data that show home sales contracts improved for the third consecutive month through August, in part because of the federal program.
Ader said first-time home buyers are a major segment of the housing market, especially on sales of homes worth $150,000 and less.
If Congress is going to extend the program, “now is a good time. You should have a contract to purchase by middle of October, or you will run out of time under the current program.” He said it takes about 60 days to close on a house.
Stern said the federal program helped jump-start a stagnant local real estate market. “We have sold a number of homes because of this program. It gave us a jolt.”
He said housing sales last January were the worst he had ever seen in his career. “I almost got a job pumping gas,” he said with a laugh.
Ader said if the market continues to improve after the tax credit ends, “we will agree that the Capital Region’s housing slump has ended.”
Stern said first-time home buyers can also qualify for the state’s Mortgage Credit Certificate Program. The program allows people to convert 20 percent of their annual mortgage interest into a tax credit that can be deducted from their federal income tax liability.
“That could save the average home buyer $1,500 each year,” Stern said.