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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I was planning to write a similar blog post, but you beat me to it. I may just do it anyway!
Melissa - I would. The more folks know, the better. And you likely have some different readers than I do. You might think about adding it to you main website, too.
Jeff
Jeff - Hope this tax credit will be an added incentive that helps to move the inventory of homes in your area.
Jeff,
I think that state tax credit is a tremendous idea. I wish more states did that.
Donna - well it worked well before and I imagine it will again. Not sure how the state is paying for it, though. :)
John - I agree. We used up the fundslast year in 4 months and the inventory of new homes dropped dramatically. I suspect it will have the same impact this year, PLSU the program also benefits firsdt time home buyers.
Jeff
Hi Jeff! CA residents are fortunate to have such an incredible incentive to purchase homes there. Hopefully more states will follow suit!
I've read the bill information on both the CA State and the Federal credits. To my understanding the CA state bill lists: "they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010." And the Federal bill lists that the enforceable contract must be signed by April 30, 2010 (closing by June).
As great as it sounds, how does this leave room to "time it right" and get both credits? Very interested to find out!
Jeff - I think this is a good idea, as the Federal First Time Homebuyer Tax Credit is ending. I hope lots of Californian's will be able to use this credit.