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Home developer gives 'tax credit' to buyers.

A condominium developer here isn't waiting for Congress to pass President Bush's proposed $5,000 tax credit for first-time homebuyers.

He's giving anyone buying for the first time an immediate $5,000 reduction in the home price, and then asking that the money be returned after the tax credit becomes law.

"If the credit never passes, we won't ask for the money back," says Steven Schacter, a principal in the company developing Hawthorne, an 80-home condominium community in the Glenville section of Greenwich.

"We think the proposal's such a great idea that if Congress doesn't act on it, we'll do it ourselves," he said.

Under Schacter's plan, Hawthorne buyers who have not owned a home for the past three years (President Bush's definition of first-time homebuyers) will sign a contractual note at closing promising to return the $5,000 when they realize their tax credit. In return, the money will be deducted from the price of Hawthorne's townhomes -- currently ranging from $229,000 to $329,900.

"Combined with the lowest mortgage rates in almost three decades, our tax credit plan should create some of the most favorable purchasing conditions in years," noted Schacter. "Even before announcing our plan, we've sold four residences at Hawthorne in the last nine days. Now, for buyers seeking a better lifestyle, these additional savings could make all the difference in the world."

As proposed by President Bush as part of his recovery plan, the tax credit would equal 10 percent of the purchase price of the home, up to a maximum credit of $5,000. The credit would apply to homes purchased between Feb. 1 and Dec. 31, 1992, and would be evenly divided over two years.

As a complimentary plank in the Bush proposal, first-time homebuyers would also be allowed to withdraw up to $10,000 from Individual Retirement Accounts without penalty for use as downpayments.

"That's another good idea," said Schacter. "While many young buyers today can easily afford the monthly carrying costs, scraping together enough money for the downpayment is often a very big problem. Allowing them to tap IRA's without penalty for this purpose is a very positive idea for stimulating sales."

Seventeen residences remain available for sale at Hawthorne. They range in size from 1,000-square-foot, two-bedroom apartments to two- and three-level townhouses with two or three bedrooms and up to 1,550 square feet of living space.
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Title Annotation:Steven Schacter to give $5000 tax credit to first-time homebuyers
Publication:Real Estate Weekly
Article Type:Brief Article
Date:Mar 18, 1992
Words:398
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