Are This Year’s Home Purchase Tax Credits Enough to Make Home Ownership Affordable in New York?

New York City has always been notoriously expensive.  In the 1990s, you could buy a corned beef sandwich for just over four dollars at a New York style deli in the suburbs of Miami, and it would come with a plate of French fries fresh out of the fryer, plus never-ending half dill pickles in a tray on the table.  The same sandwich in New York would set you back nine bucks, with none of the sides.  Those prices sound almost laughably idyllic in 2024, even in Middle America.  Big Apple cynicism is a logical response, then, when you find out that several tax credits this year aim to make homeownership more affordable.  This year’s tax credits are in the five figures, which is chump change in New York, but they might make all the difference for people who are on the cusp of being able to afford a real estate purchase.  For help becoming one of New York’s lucky few first-time homebuyers this year, contact a Bronx real estate attorney.

A Tax Credit for First-Time Homebuyers

First-time homebuyer is an enviable status that few people can achieve, and a new tax credit just made it even more enviable.  People who purchase a house or condo in 2024 and who have never owned real estate before are eligible for a $10,000 tax credit.  Even with this hefty tax credit, home ownership is still out of reach for most Americans who have never owned real estate, unless their parents can contribute money for a down payment.  It may make all the difference for some prospective buyers, the ones who are within $10,000 of their goal.

A Tax Credit for Owners Who Sell to First-Time Homebuyers

Low wages and the high cost of groceries are big enough obstacles to entering the home ownership game, but the lack of available properties doesn’t help, either.  With today’s mortgage interest rates, current owners are reluctant to sell.  Therefore, the IRS is offering a $10,000 tax credit to homeowners who sell their properties to first-time homebuyers.  The tax credit will make these owners’ purchase of a new property somewhat easier.

A Buzzkill for Residential Real Estate Investors

Besides all of these other obstacles, real estate investors snapping up properties and pricing out first-time homeowners may be the toughest to overcome.  Therefore, the IRS is reducing the tax credits available to real estate investors who purchase residential properties.  In 2023, a quarter of residential real estate purchases were by investors, which is bad news for prospective buyers as well as for tenants, since small-time landlords don’t get tax breaks for making rent prices affordable.  This year’s tax credits aim to shift the balance in favor of resident owners.

Schedule a Confidential Consultation With a Bronx Real Estate Attorney

A real estate lawyer can help you make wise decisions about buying a real estate property for the first time.  Contact Cavallo & Cavallo in the Bronx, New York to set up a consultation.

Source:

finance.yahoo.com/news/janet-yellen-says-almost-impossible-150015396.html