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New York state will offer first-time homebuyers a new tax credit worth one-fifth of their yearly mortgage interest costs, building on the U.S. government’s program to spur the housing market, Governor David Paterson said on Monday.
The state’s mortgage agency, which helps low- and moderate-income individuals buy homes, will run the new Mortgage Credit Certificate program. The tax credit will only be offered to people who qualify under the agency’s income and purchase price limits, the Democratic governor said in a statement. People who get their mortgage from the state agency will not qualify.
The federal $8,000 tax credit for people who are buying their first home expires on November 30.
New York’s metropolitan housing market has held up better during the downturn than others around the nation.
The New York index is still more than 73 percent higher when compared to January 2000, according to Standard & Poor’s/S&P Case-Shiller Home Price indices for May, although it has fallen nearly 20 percent from the June 2006 peak.
New York is the first state to offer this kind of tax credit, a Paterson spokesman said, though other states offer extra help to home buyers. For example, California in March began offering a $10,000 credit for new home purchases.
A New York homeowner paying 5.5 percent interest on a $150,000 mortgage would pay about $8,200 in interest in the first year, according to Paterson’s estimates. The new state tax credit would be worth $1,640, he said.
The remaining 80 percent of the mortgage interest will still qualify as an itemized tax deduction on federal returns.
New York will use about $80 million of its private activity bond program to pay for $20 million of the certificates.
The Internal Revenue Service sets limits on how much tax-free debt states can sell for private activities.
http://www.reuters.com/article/GCA-Housing/idUSTRE5794HT20090810
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Tenants renting buy-to-let properties are to get more protection if their landlord faces repossession.
The government has promised to work with court rule makers to secure a longer notice period for the tenants of struggling buy-to-let landlords.
Junior housing minister Iain Wright told MPs he planned to work with the Civil Procedure Rules Committee, the body which sets the rules for the civil courts, to give the tenants of struggling buy-to-let landlords up to seven weeks’ notice if their landlord default on their mortgage. The minister said: ‘At the moment, they only get about two weeks notice and that’s not fair.’
Mr Wright told Inside Housing the issue of tenants of struggling buy-to-let landlords losing their homes was a matter of great concern to him. He said: ‘It doesn’t seem fair if you’re not in arrears and your house is taken from under you. We need to provide as much security as possible.’
The minister was responding to a set of questions by Liberal Democrat economic spokesman Vince Cable, who quizzed him on the impact of recently-announced government measures such as the mortgage rescue scheme, which enables struggling homeowners to stay in their home as housing association tenants, and its mortgage support scheme, which enables them to defer mortgage payments, with the government acting as a guarantor if they default.
Mr Cable argued that the mortgage support scheme was being ‘very tightly drawn, in such a way as it excludes large numbers of people who might otherwise be eligible’.
And he argued that the 9,000 people predicted by the government to benefit from the scheme, coupled with the 6,000 expected to benefit from its mortgage rescue scheme, only made up a small portion of the 75,000 households that the Council of Mortgage Lenders has predicted will be repossessed this year.
Mr Wright said the government was ‘working night and day’ to ensure that repossessions are minimised as much as possible.
The number of repossessed buy-to-let properties shot up by 166 per cent in the third quarter of last year to 2,400, compared with 900 in the same period the previous year.
This story was found at: www.insidehousing.co.uk
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