Not So Fast Folks - First Time Home Buyer Credit Not Extended

By Cristina Callegari Kanellopoulos

There was a misleading media frenzy this morning reporting that the First Time Home Buyer Credit has been extended. Unfortunately, this isn't accurate.

Here are the facts:

• The tax credit extension is NOT currently a stand alone bill. It is being packaged in as part of a compromise on the EI (Employment Insurance) Bill currently in the Senate.
• Democrat and Republican Senators alike are in the process of negotiating the EI Bill with the tax credit included as an amendment. If they agree on the proposed amendments to the EI Bill, it is possible that the Tax Credit Extension Bill could pass the Senate as early as this week.
• The House of Representative has released a statement that they will agree to whatever the Senate decides. If that is the case the Tax Extension could be passed as early as next week in the Senate and House of Representatives.
• If the Senate does not agree to the amendments in the proposed EI Bill, a separate stand-alone Bill will need to be introduced to the Senate. This Bill will likely be introduced by Senators Johnny Isakson (R-GA who is also a Realtor) and Chris Dodd (D-CT).

While there is no guarantee that the EI Bill will pass with the First Time Tax Buyers credit as an amendment, I remain hopeful that it will.

I will continue to keep you updated on the subject.

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.