By Jenna Mink, The Daily News, Bowling Green, Ky.
Nov. 2--As lawmakers look at extending the federal first-time homebuyer tax credit, some local builders are applauding.
Local builders and real estate agents lobbied to extend the tax credit, which they say has boosted home sales. Buyers who have not owned a home in the past three years can get up to $8,000 in tax incentives when they buy a home. The credit is due to end Nov. 30, but lawmakers in Washington are looking to extend the program.
They are proposing the credit be extended until April 30 and expanded to allow current homeowners to get $6,500 in tax incentives when buying a new house. Under the extension, the maximum annual income a buyer can have would be raised to $125,000 for individuals and $225,000 for married couples.
For the local housing industry, an extension will be a big help, said Anita Napier, executive officer of the Builders Association of Southcentral Kentucky.
"Overall, we're just thrilled with it, not only the extension, but the expansion," she said. People who already own a home "are typically looking to move up to a larger home."
And, when second- and third-time homebuyers buy a bigger house, it leaves first time homebuyers with a better selection, she said.
Officials estimate a tax credit extension could increase national home purchases by 383,000, creating 350,000 jobs and $16.1 billion in wages and salaries, Napier said.
Also, an extended credit is expected to generate $3.2 billion in tax revenues for local and state governments and $8.4 billion for the federal government, she said.
"Here, our housing sales are down somewhat and yet the $8,000 tax credit is one of the key tools that has enabled us to move existing house sales as well as new homes," Napier said.
So far this year, about 883 homes have been sold in Bowling Green and Warren County. Last year, 1,051 homes had been sold by Oct. 31, according to the Realtor Association of Southern Kentucky.
At J. Allen Builders in Bowling Green, about 80 percent of buyers this year have taken advantage of the tax credit, owner Jody Allen said.
"I've got to only assume that we sold some houses that we wouldn't have sold without that tax credit," he said. "I think it's absolutely crucial that they get some extension on it."
Sales are down 50 percent from 2006 and 2007, but they're up from 2008, most likely due to the tax credit, he said.
"Between Thanksgiving and Christmas is usually a dead period anyway," Allen said. "To extend that credit, I think is vital for us to get 2010 started off with some sales."
While it's difficult to begin building a home during wintry weather, an extended credit might influence people to shop for a new home over the next few months, especially if the credit expires at the end of April, Napier said.
"They will go ahead and make that move now to get (their home) before the deadline," she said. "So it will definitely spur some action earlier than you normally see."
The existing credit had a similar effect on October sales. Some local customers bought or considered buying a home last month in anticipation of the November deadline, Napier said.
Donnie Sims, a real estate agent with Coldwell Banker Legacy in Bowling Green, said some potential buyers contacted him in October -- most of them were afraid the tax credit would not be extended and wanted to beat the deadline.
"I think it has helped for people who were thinking about buying ... it kind of got them off the fence," he said. "They need to pass this. I think it will be one of the best things as far as improving the economy."
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