The Federal Home Buyer Tax Credit has expired, but if you live in California you will be pleased to know about the "2010 New Home/First-Time Buyer tax credit" that buyers are taking advantage of. Although $100 Million dollars sounds like a lot, keep in mind that it will eventually run dry, this program is on a "first-come-first-serve" basis.
NOTE: You can apply for the First Time Home Buyer Credit (see definition below) or the New Home Tax Credit (for brand new, never-lived in homes).
Here are a few highlights on California's hombe buyer tax credit:
- These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence (not an investment property).
- The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010.
- Applications must be faxed after escrow closes.
- House must be purchased by or before January 1, 2011.
DEFINITIONS
FIRST-TIME BUYER CREDIT: A qualified principal residence, for purposes of the First-Time Buyer Credit, must:
a) Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home.
b) Be eligible for the California property tax homeowner's exemption.
c) Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
d) A first-time buyer is any individual (and the individual's spouse/RDP, if married on the date of purchase) who did not have an ownership interest in a principal residence, either in or out of California, during the preceding 3 year period ending on the date of the purchase of the qualified principal residence.
FOR THE "NEW HOME" Credit: A qualified principal residence, for purposes of the New Home Credit, must:
a) Be a single family residence, either detached or attached. This can be a single family residence, a condominium, a unit in a cooperative project, a house boat, a manufactured home, or a mobile home.
b) Have never been occupied. Sellers must certify that the home has never been occupied in order for a taxpayer to receive an allocation of the credit.
c) Be eligible for the California property tax homeowner's exemption.
d) Be occupied by the taxpayer as their principal residence for a minimum of 2 years immediately following the purchase.
If you've already purchased a home and you closed escrow on or after May 1, 2010 click on this LINK for instructions on how to claim your credit. For more information check out all the Frequently Asked Questions.
HAVEN'T PURCHASED A HOME BUT ARE LOOKING NOW? Take advantage of this tax credit, contact us we can get started!
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