Gov. Schwarzenegger has signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. This bill provides $200 million in tax credits for qualified first time home buyers in California.
It involves a credit of 5% of the purchase price not to exceed $10,000 . To qualify you must be a first time home buyer of a new OR existing home and the sale must occur between May 1, 2010 and December 31, 2010 or after December 31, 2010 until August 1, 2011. This credit will be applied in three equal installments over three consecutive years and the buyer must live in the property for two years or will have to repay the credit.
The bill received wide support on all sides and is expected to generate some economy stimulus via construction repairs and rehabilitation to the homes as well as retail sales of items for home improvements.
Almost 40 percent of first-time home buyers say they wouldn't have bought a home if the federal tax credit for first-time home buyers was not available to them, per C.A.R. research done last year. The positive effect of these home buyer tax credits is obvious.
California's former home buyer tax credit program for new home purchases had such a favorable outcome (particulaarly in the Ventura County Real Estate Market) that it depleted the tax credits by the end of June 2009, eight months before it was to expire and just as the state's housing markets seemed to be making a comeback. Unlike last year's legislation, AB 183 includes a tax credit for the purchase of an existing home by a first-time home buyer.