Tax Breaks for Homeownership in Texas
In any state, owning a home is a huge commitment of time, effort and money. Thankfully, the state of Texas offers a handful of tax breaks for diverse types of homeowners, ranging from new owners to long-time owners making eco-friendly modifications to their homes. Tax breaks and incentives change over time, so keep up to date at the Texas Department of Housing and Community Affairs' official website.
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Texas Mortgage Credit Program
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The TDHCA helps Texas residents purchase new homes, catering especially to first-time buyers. The program issues Mortgage Credit Certificates that allow homebuyers to claim a tax credit on their mortgage. This credit, a dollar-for-dollar reduction on federal tax liability, equals 30 percent of the mortgage loan's annual interest, not to exceed annual federal income tax liability. Texas residents who haven't owned a home in the past three years, use their home as their primary residence and qualify for a mortgage loan from a state-approved lender are eligible for this state-exclusive tax credit.
Renewable Energy Systems Property Tax Exemption
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Though the majority of Texas' green energy tax incentives apply to businesses, the State Energy Conservation Office offers one tax break for homeowners. The Renewable Energy Systems Property Tax Exemption – which caters to commercial, industrial and residential properties – offers an exemption from taxation based on the value of eco-friendly additions to the property, including solar and wind-powered devices used to heat, cool or provide energy to the home.
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TDHCA First-Time Homebuyer Program
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Though the TDHCA's First-Time Homebuyer Program isn't a tax break, it does help Texas residents on the road to homeownership. This program offers 30-year, fixed rate loans to homebuyers in the Lone Star State, specifically targeting low-to-moderate income buyers. These loans also provide recipients with down payment and closing cost assistance.
Applying
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Homeowners and first-time homebuyers can apply for the TDHCA's Mortgage Credit Program or the First-Time Homebuyer Program at participating, state-approved mortgage lenders. The TDHCA offers a full list of lenders – available in locales from Abilene to Wylie and totaling over 1,050 as of 2011 – at its official website. Homeowners can use Form 50-123 to apply for the Renewable Energy Systems Property Tax Exemption. The state's Window on State Government website offers this form for free download.
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