Facts about the Federal and California Home Buyer Tax Credits - Spring 2010

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Facts about the Federal and California Home Buyer Tax Credits - Spring 2010

Apr 4th, 2010 by The Cilks

The federal government and the State of California are both offering tax credits to Californians purchasing residential real estate in the spring of 2010.

Federal Credits: First-time home buyers may qualify for up to $8,000 in federal funds, while move-up buyers/long-term residents could qualify for $6,500.

* The tax credit cannot exceed $8,000 for first time buyers, or $6,500 for long-term residents and is calculated on 10% of the purchase price

* The buyer must have a fully executed, binding contract by 04/30/2010, with close of escrow on or before 06/30/2010.

* The purchased property MUST BE the taxpayer’s primary residence (i.e., the one where the buyer/taxpayer lives most of the time)

* Maximum purchase price of $800,000

California Credits: First-time buyers and buyers of new homes (or homes that have never been occupied) may qualify for up to $10,000.

* The tax credit cannot exceed $10,000 or 5% of the purchase price.

* The deadline to have a fully executed, binding contract is December 31, 2010. Close of escrow must occur prior to 07/31/2011.

* The purchased property MUST qualify for the homeowner’s exemption from property taxes AND be the buyers’ primary residence for a minimum of 2 years from the date of purchase.

* Applications will be accepted beginning May 1st, 2010.

* The buyer may wish to reserve a tax credit with a reservation request. In order to do so, the buyer and seller must provide proof of a fully executed, binding contract on or after 05/01/2010 and prior to 12/31/2010.

* Seller must certify that the home has never been lived in

Caveats:

* Only one credit is allowed per taxpayer.
* Buyer does not qualify if they took advantage of a 2009 New Home Credit.

* Buyer must be 18 and over

* Buyer CANNOT be claimed as a dependent of any other taxpayer for the tax year of the purchase

For more information, give Bob a call at 925.487.8734 or consult with your tax adviser