New California $10,000 Tax Credit for Home Buyers
If you purchase a principal residence between May 1st, 2010 and Dec. 31st 2010 and close escrow by Aug. 1st 2011, you will be eligible for a $10,000 tax credit from the state of California.
Dear C.A.R. Member:
I’m gratified to report that late this afternoon, Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. His actions today are the result of our efforts in Sacramento over the last several weeks as members and our team in the capital worked for the bill’s passage before it landed on the governor’s desk.
AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).
The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year.
The state’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner. Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.
AB 183 will significantly contribute to the effort to stimulate jobs-creation within California’s housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon and returned to the lender, or have been sitting on the market for extended periods of time. It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.
Your Association’s efforts at the state and federal level to help protect private property rights and your right to conduct business are ongoing. This promises to be another busy year in the state legislature and in Washington , D.C.
If you’re not already involved in the political process, I encourage you to do so. You can go to car.org/governmentaffairs/getinvolved/ for a quick guide to involvement opportunities at the local, state, and national levels.
Sincerely,
Steve Goddard
2010 President
CALIFORNIA ASSOCIATION OF REALTORS®
1 reply on “New California $10,000 Tax Credit for Home Buyers”
*** TAX Credit AB 183 violates first-come, first-served basis***
The AB 183 statement: “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.”
At that time most people believed that it would be the same as IRS Credit for first time home owner.
I bought my first home and closed escrow account on 05/19/2010. My realtor as well as the escrow employees did not know about this 14 days limit to submit the application. No body told me about that until I visited FTB website on 06/07/2010. Even though, it was 5 days late, I faxed my application on that day. And my application was denied.
I believe it is unfair practice. It is unfair because it is not a first-come, first-served basis as the law said. I submitted application and bought a house first, but my application was denied because 14 day limit. Whereas, other homeowners bought a house after me and submitted application after me, but their application were approved.
FTB should announce clearly and widely on radio, TV, not only on its website and should allow the time enough for the information reach the recipients.
FTB should do more and clear because normal people may assume it is the same as IRS. Moreover, two-week limitation is too short .
What do you think if the Right to speech have a limit “you cannot critize the government?” like Chinese communist? What a ridiculous bill!