In 2009, buyers quickly reserved all $100 million of California’s available credits within just a few months. Now, those who missed out have a second chance to take advantage of the huge savings.
The new Assembly Bill 183 was signed into law on March 25, 2010. 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 all purchasers (not just first-time home buyers) of new 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).
If you purchase before April 30th, you may be able to qualify for both the $10,000 California tax credit, and the $8,000 federal tax credit on homes closing prior to June 30th.