Bishop visits first-time homebuyers helped by tax credit

Laura and Carey McKinney of Hampton Bays bought their first house earlier their month with the help of an $8,000 tax credit from the federal government.

When U.S. Representative Tim Bishop of Southampton visited the McKinneys’ new home on Friday, he cited it as evidence of the effectiveness of the tax credit program, which he voted to extend earlier this month.

The program, which offers an $8,000 tax credit to people buying their first home, aims to spur people to buy houses in an effort to stimulate the economy. The tax credit was originally part of the stimulus bill signed into law in February, and was set to end on November 30. The bill that Mr. Bishop voted for earlier this month extends the program to April 30, 2010, while also extending other stimulus programs like unemployment insurance benefits.

President Barack Obama signed the bill into law on November 6.

“This is the homeowner version of Cash for Clunkers,” Mr. Bishop said as he stood in the McKinneys’ unfurnished living room, conversing with aides and local realtors.

The McKinneys closed on the 996-square-foot house about two weeks ago and plan to move in with their 6-year-old son, Kavesh, at the end of the month. They said the tax credit was a factor in their decision to leave the house they rent on nearby Rampasture Road and buy the Nassau Avenue home for $323,000.

“It’ll go right back into the house,” Mr. McKinney said, referring to the $8,000, which he and his wife expect to receive when they file their taxes for 2009. “She wants a new kitchen.”

The family is pouring work into the new house. Mr. McKinney, an electrician, has been doing all the electric work himself, putting in about 100 hours per week for the last two weeks, he said. In the weeks before they move in, they said they plan to finish painting, installing the bathroom, finishing the floors and putting in new baseboards and molding. When Mr. Bishop visited the home, a painter was putting a dark blue coat on what will be Kavesh’s room.

Mr. Bishop, who represents eastern Long Island in the House of Representatives, highlighted all the work going into the house as economically stimulative aspects of the tax credit plan. He said not only does it help the real estate market, but it creates work and fosters a demand for materials and supplies. This is part of the reason he and 330 other representatives voted to keep the program going another few months, he said.

“We put something in place, we saw that it worked and we decided to extend it,” he said.

The bill, called the Emergency Unemployment Compensation Extension Act of 2009, also broadens the homebuyer tax credit program introduced in the original stimulus bill, allowing people with higher incomes to take advantage of it. Originally, an individual had to make less than $75,000, or $150,000 for a couple, to receive the tax credit. Now, the maximum is $125,000 for an individual and $225,000 for a couple. It also included a $6,500 tax credit for homebuyers who lived in their current home for five years or more.

As Mr. Bishop visited inside, Mr. McKinney circled his half-acre yard, pointing out the compost area he plans to convert into a vegetable garden for Mrs. McKinney, the side yard where he hopes to build a pool and the garage he wants to turn into a family room.

“I’m still waiting for someone to go, ‘wake up,’” he said.