Irena Popilevsky

Buying a home is about to get cheaper for a whole new crop of homebuyers - $6,500 cheaper.

First-time homebuyers have been getting tax credits of up to $8,000 since January as part of the economic stimulus package enacted earlier this year. But with the program scheduled to expire at the end of November, the Senate voted Wednesday to extend and expand the tax credit to include many buyers who already own homes. The House is scheduled to vote on the bill Thursday.

Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers - or anyone who hasn't owned a home in the last three years - would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30.

"This is probably the last extension," said Sen. Johnny Isakson, R-Ga., a former real estate executive who championed the credits.

The homebuyers tax credit is one of two tax breaks totaling more than $21 billion that the Senate included in a bill extending unemployment benefits for those without a job for more than a year. The other would let companies now losing money recoup taxes they paid on profits earned in the previous five years.

"We are still in a world of economic hurt, and Congress must continue to act boldly and creatively," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee. "With the right mix of tax breaks and investments we will get through this recession and get folks working again."

The real estate industry has been pushing to extend and expand the housing tax credit. About 1.4 million first-time homebuyers have qualified for the credit through August. The National Association of Realtors estimates that 350,000 of them would not have purchased their homes without the credit.

Extending and expanding the tax credit for homebuyers is projected to cost the government about $10.8 billion in lost taxes. While the measure passed the Senate by a 98-0 vote, Sen. Kit Bond, R-Mo., questioned its efficiency in stimulating home sales.

"For the vast majority of cases, the homebuyer tax credit amounted to a free gift since it did not affect their decision to purchase a home," Bond said. "And for the small minority of buyers whose decision was directly caused by the credit, this raises the question of whether we are subsidizing buyers who may not have been able to afford buying a home in the first place."

The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.

On Your Team.
Irena Popilevsky
www.irenapopilevsky.com

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STATEN ISLAND, N.Y. -- The Staten Island Hotel filed for bankruptcy today in an apparent last ditch effort to stop a planned foreclosure sale of the Graniteville hotel.

SI Hotel Holding LLC, whose principal Leib Puretz is already in foreclosure on several signature Island projects, filed for Chapter 11 bankruptcy protection today to reorganize the 187-room hotel and prevent a courthouse sale of the building, which had been scheduled for tomorrow. Bankruptcy temporarily halts the planned auction.

Federal court filings show that the Richmond Avenue hotel has between 50 and 99 creditors, estimated assets of more than $10 million and liabilities of more than $10 million.

The hotel is not the only casualty of an inhospitable economy. Other court documents estimate Puretz is in foreclosure with more than $86 million in loans for some of the biggest developments to be built or planned in the borough in recent years.

Many of those loans were short-term and due payable in a less than a year - something that proved impossible to do when credit markets dried up last fall.

A hotel worker answering the phone today said staff is aware of the bankruptcy but it's business as usual there, with the hotel even selling out rooms some nights.

STATEN ISLAND, N.Y. -- Borough President James Molinaro joined Lowe's officials this morning for the groundbreaking of the home-center's second Staten Island location.

The new location at 661 Veterans Road West., Charleston, is expected to open in 2010.

"We welcome Lowe's to the South Shore of Staten Island," Molinaro said. "During these trying economic times, this new business will bring up to 175 jobs to Staten Island."

Lowe's opened its first Island store in 2003 in Mariners Harbor.


Advance photo/Irving Silverstein
From left, Steve Rinker, Lowe's District manager; Paula Rubio, a Lowe's human resources employee; and Borough President James Molinaro look over construction at the new Lowe's location on Veterans Road West, Charleston