California Home Buyers - More Tax Credits Coming Your Way
The California Association of REALTORS announced yesterday that a new tax credit bill, AB183, was signed yesterday by Governor Schwarzenegger. As a result, homebuyers in California may receive up to $10,000, or 5% of the purchase price of a new home in state tax credits. $200 million has been allocated.
This bill is different than the last California tax credit bill which afforded buyers of new homes (never unoccupied) up to $10,000 in tax credit and which was wildly successful - the state used up the $100 million allocated for that fund midway through the year and new home inventory practically disappeared in some areas, including Carlsbad and Oceanside.
CALIFORNIA HOMEBUYER TAX CREDIT
The new bill will allow the tax credit of up to $10,000 for (1) first time home buyers, similar to the current federal tax credit which is ending April 30 (you must have a ratified contract on your home by that date and close escrow by June 30, 2010), and (2) buyers of NEW homes (i.e., never been occupied). $100 million has been allocated for each component.
- The credit is for home purchases on or after May 1, 2010 and on or before December 2010
- Buyers can not buy a home from a relative
- A buyer cannot be a dependant
- The credit is paid out in 3 equal installments, and buyers must remain in the home for at least 2 years or forfeit the credit (repay the credit to the state)
Assembly Bill 183 is one part of the larger overall California Jobs Initiative proposed by the Governor and is the second portion of this initiative that has been signed to add jobs and stimulate the economy.
Read the Press Release - Governor Schwarzenegger Signs $10,000 Homebuyer Tax Legislation.
Good news - if you time it right, you COULD claim up to $18,000 in tax credits, with $10,000 from the state and $8,000 from the federal program due to expire April 30 (home must close by June 30, 2010).
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