HAMMONTON — Sometime soon, Bill and Vicki Taylor will close on their new Jacob’s Street home. They are far from first-time homebuyers, but they will still be among the first people in the region to qualify for a new federal tax credit.
The couple has lived in Waterford Township for the past 20 years, and a few years ago they started looking to upgrade to a bigger house in the neighboring town.
“I wanted to move to Hammonton because I like the area,” Bill Taylor, 54, said. “It’s a nice, quaint town.”
Late last year, they finally found one that fit their needs, right before President Barack Obama signed a law that supplies tax credits for longtime homeowners looking to purchase anew.
The Worker, Homeownership and Business Assistance Act of 2009, officially enacted Nov. 6, includes the Move-up/Repeat Homebuyer federal tax credit program.
Far less well-known than the First-time Homebuyer Credit, it provides as much as $6,500 to homebuyers who have lived in one home for five consecutive years out of the previous eight-year period.
For married couples, both spouses have to satisfy the residency requirement to qualify for the credit, meaning both have to have owned and lived in one house for five straight years during the past eight years.
The credit technically is worth 10 percent of the home’s purchase price, as much as $6,500. But that means that in almost every case the credit would be $6,500.
“When would that not be the case?” asked the Taylors’ agent, Joe Wiessner, of Joe Wiessner Realty in Hammonton. “What are you gonna buy, a doghouse?”
Purchases of $800,000 or more are not eligible for the credit, and the credit is worth less for buyers with certain personal income levels The credit phases out for single buyers earning from $125,000 to $145,000, and for married couples making from $225,000 to $245,000 a year.
The program expires April 30, unless a buyer has a binding sales contract by the end of April and purchases the home by June 30.
Wiessner said the Taylors qualify for the full credit, making them the first clients he has had take advantage of the program since it was enacted.
He said the enticement of this program and the first-time homebuyer program has people looking for homes earlier in the year than he normally sees.
“Spring came early this year,” he said. “My office has been very, very busy right from the first full day of business this year, and I think it’s in part because of that free money.”
Still, area real estate agents reported few clients taking advantage of the program so far.
“I think a lot of it has to do with the market that we’re in,” said Tom Johnson, a broker sales associate with Prudential, Fox & Roach Realty in Atlantic County. “There’s not a lot of incentive to sell.”
Johnson said he has seen most longtime homeowners holding onto their houses after watching their values plunge when the housing bubble burst.
He said the first-time homebuyer credit “pushed people off the fence” and into buying a home, just like the “cash for clunkers” program pushed people into buying a new car.
“I think the cash for clunkers incentivized people to get rid of their old car a lot more than the $6,500 does to get people out of their old house,” he said.
Still, he said the tax credit is a nice way to soothe people’s unease about selling their homes for less than they originally expected.
He cited recent clients he has had who moved into Atlantic County from North Carolina when they both were transferred here for their jobs.
That couple qualified for the program, and he said they thought of it as icing on the cake.
“It helped take the sting out of the fact that they took their price for less than they were looking for when they sold their house in North Carolina,” he said. “It wasn’t quite as painful.”
In the Taylors’ case, they saw their Waterford home’s price decline, but were happy at least to sell it for what they were told it was worth on the market at the time. The tax credit was “a nice hit” as well, Bill Taylor said.
“That’s a big help with my income tax,” he added.
He also said it allowed them to upgrade into the type of place they were looking for at a time when few can say the same.
“I think I’m going into a better community, a bigger house and just a better area, to be honest with you,” he said.
Contact Lee Procida: