Federal Homebuyer Tax Credit
Your buyers have one more month to take advantage of the homebuyer tax credits. Expiring April 30, 2010, first time homebuyers may be eligible for an $8,000 tax credit, which does not need to be paid back so long as they remain in the home for three years. Non first time buyers who have lived in their principal residence for five consecutive years within the last eight may qualify for a $6,500 tax credit. Nearly all properties qualify including single-family homes, condos, townhomes, and co-ops.
State Homebuyer Tax Credit
Governor Schwarzenegger 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. Eligible taxpayers who close escrow on qualified principal residences between May 1, 2010 and December, 31, 2010, or who close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of five percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Under the bill, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state). Buyers also must be at least 18 years old and unrelated to the seller. First-time buyers are defined as those who have not owned a home in the past three years.
