Comments Off | Wednesday, May 5, 2010
On March 25, 2010 California approved a new $10,000 First-Time Homebuyer tax credit for purchases that close escrow on or after May 1, 2010. (Cal. Rev. & Tax Code § 17059.1)
These tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are 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. The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.
However, taxpayers may not request a New Home Credit reservation if they have entered into the contract before May 1, 2010.
$100 Million of tax credits has been allocated to First-Time Homebuyers on a First-Come, First-Served Basis.
These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased.
The California Association of Realtors® predicts that it will take only 10 – 20 days to deplete the $100 million allocation for this credit.
Time is quickly running out so act now.
Check this site for further details: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml