California Passes $10,000 Tax Credit For New Home Purchases
Posted 03/04/2009 - 13:37 by Emily Schuyler
California Passes $10,000 Tax Credit For New Home Purchases
Last month, the legislature for the State of California passed a new budget which included a tax credit of up to $10,000 for the purchase of a newly constructed home. This tax credit is only available for homes that are new construction and have not been lived in. The following are the features of the new tax credit, but additional details are still being worked out:
1) The credit is equal to 5% of the homes purchase price, up to a maximum of $10,000.
2) The credit is available from March 1, 2009 to March 1, 2010. The maximum budgeted for this credit is $100 million. It has not been determined at this point if the effective date is when the contract is signed or when escrow closes. This should be determined shortly.
3) The tax credit will be spread over 3 years. So, if you qualify for the $10,000 credit it will be paid in 3 annual installments of $3,333. Homebuyers will have $3,333 off their taxes for the first three years after purchasing the new home.
4) The new home buyer must live in the home for at least 2 years. There is no repayment requirement unless the owner sells or rents the home within 2 years of purchase.
5) There are no income restrictions for qualifying for the tax credit.
6) You do not have to be a first-time homebuyer to be eligible for this tax credit. Any homebuyer buying a new home qualifies.
7) The home must be a newly constructed home and never previously occupied.
For additional information about this credit, please visit: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
