California's governor signed a home buyer tax credit into law today that will keep the tax
incentives to buy a home going until the end of the year.
Although the federal home buyer tax credit runs out for home buyers at the end of April, California has one that will kick into gear on May 1st, keeping the homebuyer party going until years end.
Here are the details:
- 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 purchasers of new, or previously unoccupied, 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).
So there you have it. Purchase a qualified home for $200,000 and get $10,000 in California tax credits over the next three years. Check out the State of California Franchise Tax Board website for more information.
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