Tuesday, March 23, 2010

New CA Homebuyer Tax Credit up to $10,000. AB 183

New CA Homebuyer Tax Credit up to $10,000. AB 183
Assembly Bill No. 183 passed the Assembly and Senate on 3/22/2010
The governor signed it the next day.

AB 183 picks up when the $8000 Federal Tax Credit leaves off - May 1, 2010.
If you are under contract by 4/30/2010 and close by 6/30/2010, you could get $18,000.

1. The purchase of a qualified principal residence on or after May 1, 2010 and before August 1, 2011, pursuant to a contract executed on or before December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, until the $200,000,000 is gone.
Some say in 2-3 weeks!!!
(Under contract on or after 5/1/2010 and by 12/31/2010, and closed before 7/1/2010)

2. The amount of the tax credit is the lesser of 5% of the purchase price or $10,000, which means any home over $200,000 in price will be limited to the $10,000 credit.

3. The total allocation of $200,000,000 in tax credits is divided between first time home buyers and purchasers of homes that have never been lived in (new homes), $100,000,000 being allocated to each type of purchaser.

4. Only one credit will be issued to a first time homebuyer that buys a new home.

5. A “qualified principal residence” is an attached or detached home that will be used as the principal residence of the purchaser, and has either never been occupied, or is purchased by a first time home buyer.

6. A “first time home buyer” is and individual, or individual's spouse, who has no present ownership interest in a principal residence now or over the three previous year period, ending on the date of purchase.

7. The tax credit is non-refundable, meaning it is a use it or lose it credit. NOTE...You would need to have $3,333 of state tax liability each of the next three years to utilize the maximum amount of the credit available. It will be allocated over three years, beginning with the year the escrow closes on the new home.

8. You must apply for the credit within 2 weeks of closing or lose it.

9. Buyer must live in the home for 2 years or return the money.

If you are under contract by 4/30/2010 with a qualifying home, and close by 6/30/2010,
you should be able to double dip!!!  You can get both the State and the Federal Tax credits but you must hurry.  competition is high and inventory under $500K is low, therefore we are getting multiple offers on most properties under $500K.

AB 183  is the New CA Homebuyer Tax Credit for up to $10,000.


Dennis Smith, ABR, SRES, e-PRO, CDPE, Realtor® DRE# 00476662
Certified Distressed Property Expert
RE/MAX By-the-Sea
Formerly with Taylor Place Real Estate
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