New First-Time Home Buyer Tax Credit For California Buyers Just Signed Into Law By The Governor
Great news for California first-time home buyers.
On Monday, March 22, 2010, the California State legislature passed AB 183, providing $200 million for home buyer tax credits. The Governor isigned the bill into law today! Part of a package of four bills passed at the request of the Governor, AB 183 is designed to help stimulate the economy and create jobs. It allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.
In order to qualify the eligible taxpayer must close escrow on a qualified principal residence between May 1, 2010' and December 31, 2010. Additionally, if a purchase contract is executed prior to December 21, 2010, they may qualify for the tax credit if they do close escrow before August 1. 2011.
This credit is equal to the lesser of 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. In order to qualify for the full $ 10,000 the home must sell for at least $ 200,000. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).
It would be prudent to be at the head of the line with your purchase contract. Even $200 million dollars is not going to last long!
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