I’ve been in the real estate game since 1985. I’ve seen Federal and State incentives come and go (MCC, First House, DAP, etc.), but never has there been an enticement to buy like the $8,000 First Time Home Tax Credit. Now, California has come along and thrown more fuel on the hot real estate market fire and given us another gift–
The New $10,000 Homebuyer Tax Credit
The new bill, just signed by the Governor into law, applies a $10,000 tax credit toward purchases of new homes for all buyers and existing homes for first time homebuyers. It appears that the timing of the law to go into law after May 1st was so that there wasn’t any overlap with the Federal law, but homebuyers that got into contract prior to 5/1/2010, are allowed until 6/30/2010 to close escrow on their homes, giving them a potential boon of $18,000 in tax incentives! The California Franchise Tax Board is scrambling to cover all their bases with this law and will not have all the provisions posted on their website until 3/30/2010, but I’ve got the latest for you here.
The new bill:
Provides a 5% tax credit, up to $10,000 limit, to all buyers of new or never-occupied homes.
Provides a 5% tax credit, up to $10,000 limit, to first-time-home-buyers of existing homes.
$100 million is set aside for each program (total lf $200 million)
Requires buyers to live in the home for two years or they must repay their tax credit.
The tax credit is to be paid for in thirds over a three year period.
Sets no income limitations on buyers.