Historic Rehabilitation Tax Credit

The New York State Historic Rehabilitation Tax Credit program was enhanced from 2008. This is thanks to the Preservation League of NY. They led a diverse coalition of business and municiple leaders, preservation organizations and environmental groups to help enhance this program. The goal is to stimulate downtown and neighborhood revitalization in municipalities that need meaningful economic development tools.

The following are the changes made:

Rehabilitation of Historic Properties -Commercial:

• credit percentage increases from 6% to 10% of qualified rehabilitation costs (NYS credit is now 50% of the federal credit rate)
• Credit cap increases from 100K to $5 million
• Establishes transferability among business partnerships

Historic Home ownership Rehabilitation:

• credit cap increases from $25K to $50K per residence
• Qualifies historic housing census tracts at or below 90% State Median Family Income (SMFI)
• Establishes credit rebate provision for homeowners earning less than $60,000

More Help for First Time Buyers

In the state of New York first time buyers will receive more financial help. Governor Paterson announced on September 1 that New York will offer a federal income tax credit. The NYS Mortgage Credit Certificate (MCC) will enable first time buyers to claim a tax credit equal to 20% of their annual mortgage interest costs, potentially saving the average home buyer about $1,500. each year.
MCC can be used to reduce a home buyer's tax burden for every year the mortgage loan remains outstanding. With an MCC, 20% of the amount paid in mortgage interest becomes a tax credit than can be deducted, dollar for dollar, from a homeowner's federal income tax liability.

Sample savings:
$150,000 purchase at 5.25%- principal and interest= $829.50
$829.50 x 360 months = $298,620.00
$298.620 - 150,000 purchase price = $148,620 interest
Tax credit over life of loan equals 20% of interest
20% of $148,620 = $29,724 income tax credit

For more information consult with your mortgage lender or REALTOR.