California Passes Large Tax Credit
for Homebuyers

California has initiated its own homebuyer tax credit. The credit is for 5% of the purchase price, with a maximum credit of $10,000. That’s a dollar-for-dollar reduction against income tax payments that would otherwise be due. Homebuyers must claim the tax credit in equal installments over three consecutive years, beginning with the year of purchase. Purchasers are required to live in the home as their primary residence for two years or forfeit the credit.

To be eligible, first-time homebuyers can purchase a new or existing home. Repeat or move-up homebuyers are eligible for the credit only if they buy a new home.

Buyers of existing homes must close escrow between May 1 and December 31, 2010. The credit is available to buyers of new homes who sign purchase agreements between May 1 and December 31, and close escrow by August 1, 2011.

Separate from the California tax credit is the federal tax credit. The federal homebuyer tax credit will expire soon. If your clients want to take advantage of this tax credit, they must act fast. The tax credit is available to buyers who sign purchase agreements on a new or existing primary residence home between December 1, 2009, and April 30, 2010. Buyers have until June 30 to close the mortgage loan on their new home.

If you have any questions about how the California or federal tax credit may benefit your clients, please call me today.

18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME .
Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

February 2010 Existing-Home Sales Ease with Mixed Conditions around the Country
RISMEDIA, March 24, 2010—Existing-home sales declined slightly in February 2010, with modest gains in the Northeast and Midwest offset by softer sales in the South and West, according to the National Association of Realtors. Existing-home sales, which are finalized transactions that include single-family, townhomes, condominiums and co-ops, slipped 0.6% nationally to a seasonally adjusted annual rate of 5.02 million units in February...

Governor Schwarzenegger today signed AB 183 providing $200 million for home buyer tax credits. The bill allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.