Boost to Homebuilders
The California budget that finally passed last week contains a state tax credit for purchasers of NEW California homes. So if you’ve been eyeing a NEW home, this state stimulus is for you. The tax break is intended to assist in shoring up the state’s construction industry.
Two Breaks for First Time CA Buyers?
First time homebuyers in California who purchase a NEW home can combine the state AND federal tax credit for a total of up to $18,000! The federal program information is covered in this previous post. The details on the state credit are given below…
How do you qualify?
- The credit applies to NEW, previously unoccupied California houses and condos purchased as primary residences.
- The home must be owner-occupied for at least two years following the purchase.
- There is no income limit, and you do not need to be a first time homebuyer.
- $100 million are earmarked for the credit, which must be reserved. The credits will be awarded on a first-come first-serve basis.
How much is the credit?
- For homes priced above 100,000 - the credit is $10,000.
- For homes priced under $100,000 - the credit is 5% of the purchase price.
How do you get the money?
- You must reserve the tax credit. The credits will be awarded on a first-come first-serve basis.
- You must then claim it when you file your state tax return.
- You will receive 1/3 of the tax credit each year, for the next three years.
When do I have to purchase the qualifying home?
- The purchase must close between March 1, 2009, and March 1, 2010
- BUT you must reserve the credit, and the money may run out long before March 1st, 2010
References
At this time there is limited information available on California State Websites - California Builders Websites have information…
FAQs About the State New-Home Buyer Tax Credit - CA Building Industry Association
Tags: CA Housing, first time homeowner tax credit, real estate news, Tax Tips