Tuesday, January 12, 2010

The New Gold Rush? Schwareznegger Proposes $10,000 Tax Credit for California Buyers - No Income Limits

Those contemplating purchasing a home or condo in California in 2010 may be entitled to a big windfall.

The Governor has proposed allocating $200 million towards providing 20,000+ California homebuyers with a $10,000 tax credit.

There are few strings attached to this proposed legislation. The credit would be payable to the buyer as a $3,333 discount to state taxes over three years. It would apply to primary residences only -- but is not limited to new construction like the 2009 tax credit.

Buyers, tee up your purchases. The 2009 tax credit allocation of $100 million was exhausted in a little over three months. The credit is applied on a "first come, first served" basis.

Updated 3/23/10: The bill looks like it's become reality. $200 million will be allocated as a $10,000 tax credit for first-time buyers and those purchasing newly-constructed homes, effective May 1, 2010. That means, there are only 20,000 beneficiaries. Don't miss out on this big handout, it may be the last incentive. (5% interest rates aren't bad, either.)

Updated 3/24/10: The bill should be signed later this week. More detail was provided by the California Association of Realtors:

  • "The California legislature on Monday passed AB 183, providing $200 million for home buyer tax credits. The Governor is expected to sign the bill into law this week. C.A.R. supported this important legislation since its inception. Part of a package of four bills passed at the request of the Governor, AB 183 is designed to help stimulate the economy and create jobs. It allocates $100 million for qualified first-time home buyers who purchase existing homes and $100 million for purchasers of new, or previously unoccupied, homes.
  • The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes 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 5 percent of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 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)."

"Schwarzenegger Proposes Tax Credit to Spark New Home Building", Sacramento Bee