The tax break was an incentive for Jennifer Ciplet and her husband, of Oakland, Calif., to buy a home. Ciplet, center, looks at a place on Chace Drive in Providence with real estate agent Trish Sitcoske, left, and selling agent C.C. Wall.

The Providence Journal / John Freidah

Uncle Sam will now be paying just about anybody, it seems, to buy a house.

A new federal law will make many homebuyers eligible for a special federal income-tax break.

As a result, many people who buy a home will get a onetime payment — of as much as $8,000 — from the federal government, in the form of a federal income-tax credit.

It is the result of legislation approved by Congress earlier this week and signed into law by President Obama on Friday.

“The rebound in the housing market was one of the big factors that contributed to the growth of the economy last quarter, and brought hundreds of thousands of families into the housing market,” Mr. Obama said after signing the bill on Friday. “We want to give even more families the chance to own their own home.”

The measure is intended to spur the sale of homes in a sluggish economy, said Karl Martone, incoming president of the Rhode Island Association of Realtors. “It is definitely trying to stimulate the real estate market, and it is a tremendous positive,” he said.

It will help not only people who buy or sell their homes, but also those who facilitate such transactions, such as real estate agents, lawyers and bankers.

“It’s going to help … any industry that is related to home ownership — and there’s a bunch of them,” from hardware stores and heating-oil distributors to insurance companies, said Martone, broker for the Martone Group at RE/MAX Properties in Smithfield.

The law has two main pieces regarding real estate:

•First-time homebuyers: A tax break already exists for what the law calls “first-time homebuyers” — a tax credit equal to 10 percent of the purchase price of a principal residence, to a maximum credit of $8,000. This program was supposed to expire on Nov. 30.

But the new law gives it new life and a new deadline. The law generally says that you will be eligible for the tax credit if you enter into a written, binding contract before May 1, 2010, and close on the purchase of the principal residence before July 1, 2010, according to a summary by Congress’s Joint Committee on Taxation.

In addition, the income limits that applied under the old rules have increased, said Mark A. Luscombe, a lawyer, accountant and principal analyst for tax publisher CCH Inc., a Wolters Kluwer business. This “increases greatly” the number of buyers who will potentially qualify for the credit, Luscombe said.

For example, if you are single, you will generally qualify for the full credit if your adjusted gross income is $125,000 or less. The old limit was $75,000.

If you are married and file a joint federal income-tax return, you will generally qualify for the full credit if your adjusted gross income is $225,000 or less. The old limit was $150,000.

•Homeowners: People who already own a house will generally be eligible for a tax break. You will qualify provided that you have maintained a principal residence for at least five years out of the eight years leading up to the date of sale. The maximum credit is $6,500.

This provision may appeal to homeowners who want to move up to a larger principal residence (though there is a purchase limit of $800,000), and to those looking to downsize by moving to a smaller one, Luscombe said. (They will be subject to the same income limits that apply to first-time homebuyers.)

In Pawtucket’s Woodlawn section on Friday, preparations were being made for an open house on Saturday at Callaghan Gardens, a row of 14 townhouse-style condominiums on Burton Street.

The condos were developed by the Pawtucket Citizens Development Corp., a nonprofit community development group which focuses on affordable housing.

Five units have been sold; others are on the market, said the group’s executive director, Nancy Whit.

The old first-time homebuyer credit has sparked “more activity in terms of people looking,” Whit said. She said she is “very hopeful” that the modified and expanded credit program “will be just enough incentive to bring us some additional buyers.”

Overall, she said, the revised credit program will “help stabilize housing values.”

The new law comes as the Rhode Island real estate market struggles to recover from a classic bubble, in which prices rose far higher than the national average, then plummeted.

For the three months ended Sept. 30, the median price for single-family homes sold in Rhode Island was $210,000, down 8.7 percent from the same period last year, according to figures published Tuesday by The Warren Group of Boston, a provider of real estate data for New England.

But sales have been rising robustly. Single-family home sales jumped 19.7 percent in the third quarter, to 2,334. Lower prices have lured buyers. But the first-time homebuyer credit has also helped, said Chris and C.C. Wall, a husband-and-wife team of sales associates at Residential Properties Ltd. on Providence’s East Side.

Of the 39 transactions that the couple has placed under agreement so far this year, 20 of them involved the first-time homebuyer credit, Chris Wall said.

The new provision is “absolutely going to help” spur additional sales, said C.C. Wall.

It will also provide a breather for those who had been scrambling to meet the original Nov. 30 deadline for the first-time homebuyer credit, said Victoria Doran, treasurer of the Rhode Island Association of Realtors.

“Now that pressure is off, of trying to get people in and closed by Nov. 30,” said Doran, a broker associate at Coldwell Banker Residential Brokerage on Providence’s East Side.

The revised and expanded tax break for homebuyers will cost about $10.8 billion over the next 10 years, according to the Joint Committee on Taxation.

This and certain other provisions of the new law are to be paid for by requiring electronic filing of individual income tax returns by all but the smallest professional tax preparers, increasing penalties for failing to file partnership and sub S corporation returns, accelerating estimated tax payments for certain large corporations, and some other measures, according to CCH.

Who’s eligible

New Deadline: A federal tax break for “first-time homebuyers” was to expire Dec. 1. Under the new law, you may qualify for the break if you have a written, binding contract before May 1, 2010, and close on the purchase before July 1, 2010. The maximum credit remains $8,000.

New Feature: The law provides a new federal tax credit. You may qualify if you have maintained the same principal residence for five out of the last eight years, and now go out and buy a different principal residence. Maximum credit: $6,500.

New Rules: The new law raises the income limits, so more people will qualify, including some with higher incomes. For example, someone who is single will generally qualify for at least a partial tax break if adjusted gross income is less than $145,000. A married couple will generally qualify for at least a partial tax break if adjusted gross income is less than $245,000.

Limits: The tax break still applies to principal residences, so vacation homes and such don’t count. No credit is allowed if the purchase price exceeds $800,000. No credit is allowed unless the taxpayer is 18 years of age as of the date of purchase. Also, in general, you can’t qualify for the tax break if you buy the residence from a relative, or if you’re treated as someone else’s dependent for tax purposes.

Source: Joint Committee on Taxation, U.S. Congress.

ndowning@projo.com