Yesterday, I wrote that Califonria Governor Arnold Schwarzenegger would most likely sign into law this week the $10,000 Home Buyer Tax Credit Legislation....well this happened sooner than I thought it would. It happened this afternoon! So what does this mean to California home buyers?
Here are the details:
According to Assembly Bill No. 183, 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. So a total of $200 Million in Credits for California homebuyers!
- 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.
- The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.
- Qualified principal residence is a single family residence that is purchased to be the principal residence of the taxpayer and has either never been lived in or is purchased by a first time home buyer.
- The credit is given in 3 equal installments on tax payer's income tax returns over 3 year period.
- Tax payers will be able to reserve a credit prior to close of escrow. The taxpayer and seller will jointly sign and submit a certification that they have entered into a purchase contract, to Franchise Tax Board.
- The tax credit will be available to buyers on a first-come, first-served basis and is applied in equal amounts over a period of three taxable years. To qualify, the buyer must not be a dependant and must purchase a home that does not belong to a relative.
So now for California home buyers, will there be a stampede early on as some buyers rush to overlap with the federal tax credit that's dangling as much as $8,000 to buyers. (Yes, that could be up to $18,000 tax credit for first time home buyers!)
California home buyers will be out in full force as the spring housing market has just heated up very quickly with this new tax credit! With interest rates still at a 40 year low and home prices more affordable than any time in recent history....NOW is the time to buy!
If you are interested in new construction in the Elk Grove area, make sure to check out our new homes at Monterey Village!
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