How much is the state tax credit? The state tax credit is for $10,000 or 5 percent of the purchase price of a newly built home, whichever is less. The home must be the principal residence of the buyer, and the sale must close between March 1, 2009 and March 1, 2010. How does the tax credit work? The credit will be provided in equal amounts (up to $3,333) per year, over three successive tax years, beginning with the year the purchase is made. Will I receive the credit if I buy an existing home? The credit is only for the purchase of a newly built home that has never been occupied. That is because building a new home generates more tax revenues than the credit will cost the state. Are there any other restrictions? The taxpayer must live in the home as their principal residence for at least two years. If he/she does not, he/she will have to repay the credit. How much money is available under the program? The law limits the total amount of credits that can be claimed to $100 million. Credit reservations will be allowed on a first-come, first-served basis. It is likely that the full amount will be exhausted this year, so prospective buyers should move quickly. Can the credit be used in conjunction with the recently enacted federal tax credit? Yes. If you buy a new home between March 1 and Dec. 31 and are a first-time homebuyer, you can take advantage of both the $10,000 state credit and the $8,000 federal tax credit. California Tax Credit The tax credit is for $10,000 or 5 percent of the purchase price of a newly built home. Home must be the principal residence of the buyer and the sale must close between March 1, 2009 and March 1, 2010. The total amount available is $100 million. Credit reservations will be allowed on a first-come, first served basis. It is likely that the full amount will be exhausted this year - you need to move quickly. www.cbia.org/go/cbia/ Federal - First Time Home Buyer Tax Credit The tax credit is for first-time home buyers only and it does not have to be repaid. The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000and is available for homes purchased on or after January 1, 2009 and before December 1, 2009. Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. www.federalhousingtaxcredit.com/ |