New York to Offer Federal Income Tax Credit to First-Time Homebuyers!

Governor David A. Paterson announced that New York will offer a federal income tax credit to first-time homebuyers to encourage home sales in New York State. The New York State Mortgage Credit Certificate Program (MCC) will enable first-time homebuyers to claim a tax credit equal to 20 percent of their annual mortgage interest costs, which could save the average homebuyer around $1,500 a year. This program expands the $8,000 First-Time Homebuyer Credit, which expires on November 30, 2009.

"We applaud Governor Paterson for his vision in creating the Mortgage Credit Certificate program and for recognizing the importance of housing as a primary driver of the Empire State's economy," said Daniel J. Hartnett, president of the New York State Association of REALTORS. "The past four months of increasing home sales across the state have proven the value of buyer incentives. We expect, when coupled with the federal first-time buyer credit of $8,000, the MCC will bring additional buyers back to the market and further boost the recovery of both the state's housing market and economy." The New York State MCC can be used to reduce a homebuyer's tax burden for every year the mortgage loan remains outstanding. With an MCC, 20 percent of the amount paid in mortgage interest becomes a tax credit that can be deducted, dollar for dollar, from a homeowner's federal income tax liability. The remaining 80 percent of the mortgage interest continues to qualify as an itemized tax deduction, as long as there is sufficient federal tax liability. To read the entire State of New York press release, click here.