New tax credit

Some new information:

Great News for California Homebuyers
$10,000 New Home and First-Time Buyer Tax Credits Available May 1

There’s good news for California home buyers who want to purchase a home this year, but are unable to get under contract before the April 30th deadline for the Federal Government’s $8,000 Homebuyer Tax Credit program. In late March, Governor Arnold Schwarzenegger signed legislation that will provide a state tax credit of up to $10,000 to Californians who are buying their first home or purchasing a brand new home.

Here are important details to know about this tax credit:

Dates: These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. The purchase date is defined as the date escrow closes. The tax credit will be applied in equal amounts over three years.

For both the New Home Tax Credit and First-Time Buyer Credit: A qualified principal residence must:

Be a single family residence, either detached or attached;
Be eligible for the California property tax homeowner’s exemption, and
Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
In addition, for buyers to be eligible for the New Home Tax Credit, sellers must certify that the property has never been occupied. For purposes of the First-Time Buyer Credit, a first-time buyer is any individual who has not owned a home in the three years prior to purchase.

Eligibility: Taxpayers will not be eligible for either tax credit if the taxpayer (1) was allowed a 2009 New Home Credit, (2) is under 18 years old, (3) is related to the seller (or if the taxpayer’s spouse is related), or (4) is a dependent.

This tax credit is available to buyers on a first-come, first-serve basis! The 2009 California Homebuyer Tax Credit ran out after just four months! For California residents planning to purchase a home in 2010, acting sooner rather than later could make a big difference in your wallet!