Hearing about the new tax credits that was just passed in California sounds exciting for qualified folks looking for a boost.

But heed this: it's FIRST COME, FIRST SERVED!

Not wanting to rely on what other people write (or how they interpret) this information, I visited the State of California Franchise Tax Board

http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml

Remember last year when we had the $10k credit, starting March 1, 2009 for buyers who bought a new home It ran out in less than four months. The Franchise Tax Board stopped awaring the credits by July 2.

With our state being cash-poor, our leaders are certainly looking for ways to stimulate our economy which, like the rest of the country, was devastated by job loss and the real estate dive.

• Starting May 1, 2010 --- Tax credits apply to folks who anyone who
  • buys a newly built home
  • OR to first time home buyers who buy newly built or existing homes.
• Homes must be single-family residence, and used as buyer's principal residence for at least 2 years
• Credit is equal to 5% of purchase price, or $10,000, whichever is less
• Credit must be claimed in EQUAL amounts over three years, from the time of the purchase
• Budget allocated to this program: $200M (which costs more than last year's program)

Existing homes: Buyers must close escrow between May 1 and December 31, 2010

New homes: Additionally, the New Home Credit is available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. 

Purchase date is defined as the date escrow closes.

 FIRST COME, FIRST SERVED!

The Franchise Tax Board estimates that these credits my run out by June 30, or until the funds run out.

For those folks who bought new homes last year but the state ran out of funds by the time they applied, are again out of luck becsuse this new tax credit isn't in effect until May 1.