Now is the time for a very rare opportunity for up to $18,000 in combined tax credits from the Federal and State for homebuyers. To take advantage of both tax credits, a first time homebuyer must enter into a ratified purchace contract for a principle residence by the end of this month of April and close the transaction between May 1, 2010 and June 30, 2010. Buyers who are not first time homebuyers may qualify for up to $16,500 under these same guidelines if they have lived in their home for the last 5 consecutive years out of 8 years and as permitted under Federal Law and they purchase a home as their primary residence that has never been previously occupied as provided under California Law, basically, for the most part, a brand new home.
The $8,000 Federal Tax Credit expires at the end of the month. This credit does have income guidelines for buyers for the full $8,000. If a buyer makes over the income limit, it is possible to get a portion of the credit. Refer to your tax person to find out how much you would qualify for in credits. To receive the full credit, a single homebuyer income limit is $125,000 and married couple limit is $225,000.
For the $10,000 State Tax Credit, there is no income limit and the credit is spread over 3 consecutive years. Also, the homebuyer has to live in the home as a principle residence for 2 years or pay back the credit. Unlike the Federal Tax Credit, the State Tax Credit is on a first come, first serve basis. The State is allocating $100 million to new homes and $100 million to existing homes. Once the money is used up, the program will end.
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