As part of the recently passed state budget, California is providing a $10,000 tax credit to some buyers of new, previously unoccupied home purchases.
The $10,000 Tax Credit applies to purchasers of a newly constructed home in the State of California. The bill is called SB 15. There are conditions to receive this tax credit, some of which are still being worked out.
Here are the details:
1. The tax credit is good for 5% of the value of the newly constructed home, up to $10,000. That would mean any home priced over $200,000 would qualify for the full credit.
2. The tax credit will be available between March 1, 2009 and February 28, 2010, or when the funding authority runs out. The Legislature has earmarked $100 million for this credit, available on a first come first serve basis. This translates into 10,000 new home sales. It is unclear at this point whether the tax credit will be based on when the contract for sale is written or when the escrow is closed for the purchase.
3. The tax credit will be allocated by the Franchise Tax Board and will be available to new home buyers over a three year period. Roughly one third of the tax credit($3,333) will be available each year, applicable toward state income tax return.
4. The new home purchaser must live in the home for at least two years.
5. There are no income limitations for the purchaser.
6. There is no “first time buyer” restriction.
7. There is no repayment requirement (unless the purchaser sells or rents out the home before two years have past from the close of escrow).
This tax credit could bring a real boost in new home sales which have been hit very hard by the shifting real estate market and the current economic climate.
Contact us to discuss all the benefits and details of this tax credit. Many new home builders are offering incredible deals right now, made even more attractive with this new tax credit. We can discuss which new home communities might be the right ffit for you and your family.
