$18,000 California Home Tax Buyer Credit Ends April 30th
IMPORTANT: Contracts must be inked by April 30, 2010 and closed by June 30, 2010 in order to take advantage of the Federal and California Home Buyer Tax Credits Available.
Californians have a small window of opportunity to receive up to $18,000 in combined State and Federal Homebuyer Tax Credits. Californians must enter into a contract to purchase for a principal residence before May 1, 2010 and close escrow between May 1, 2010 and June 30th, 2010. Even if you are NOT a first-time home buyer you still may use the same guidelines and time frames to receive UP TO $16,500 in combined tax credits if they are long time residents of their existing homes as permitted under federal law and they purchase a home that has never been previously occupied.
Why $18,000? This is combining the Federal Home Buyer Tax Credit and the new California Home Buyer Tax Credit. There is a small window of opportunity where they will overlap during this time frame. Once the Federal Tax Credit expires you will still have the California Tax Credit. Please refer to our previous post for all the details on the New California Home Buyer Tax Credit.
The federal first-time homebuyer tax credit that is set to expire soon allows a first-time homebuyer to receive up to $8,000 in tax credits. Contracts must be inked by April 30, 2010 and closed by June 30, 2010. This leaves you a small window to double dip and take advantage of both the California Home Buyer Tax Credit and the Federal Home Buyer Tax Credit.
Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. The new California law applies to certain purchases that close escrow on or after May 1, 2010. Other terms and restrictions apply to both tax credits so please make sure you consult a tax professional to see what would be your options and how they would be applied to your situation.
Alex Aguilar
Team Aguilar
Real Estate Agent, Blogger!
Alex@TeamAguilar.com
www.TeamAguilar.com
Real Estate Blog
San Diego Real Estate
April 3rd, 2010 at 1:20 pm
Just how is California going to pay for the credit? Aren’t they giving out IOUs for tax refunds?
.-= Chas@Las Vegas Real Estate´s last blog ..A Rise in the Condo Market =-.
April 3rd, 2010 at 1:36 pm
Hey Chas – I’ll expand your comments to ask just how the Federal government is planning on paying for the current credits? I know . . . crickets.
April 3rd, 2010 at 2:29 pm
I have been looking for info on how they are allocating the funds and how they plan on paying for it and can’t find anything. I will keep looking and post it when I find something.
April 5th, 2010 at 2:35 pm
I believe the info is mis-quoted. The Federal Home Buyer Tax Credit expires 4/30. IRS will not accept requests for reimbursement for contracts executed after 4/30. The CA State Home Buyer Tax Credit only applies to contracts that are entered into on and after 5/1. There is no overlap. It was deliberately written so that when 1 ends the next one begins.
Both cannot be used simultaneously. Am I missing something?
If funds were still available from the 1st CA Home Buyer Tax Credit then yes, you could double-dip. But those funds are depleted, and the next one only applies for contracts signed May and later. Federal is for April and earlier… ?
April 5th, 2010 at 2:56 pm
@ Erik, I am going to review these timelines. I went over all of the dates twice because I was thinking the same thing. Let me research and see if you are correct. Thank you,
April 5th, 2010 at 4:52 pm
The CA Franchise Tax Board says it’s the date that escrow closes, not the contract date that qualifies for the California tax credit, which means you could potentially get both credits.
http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml: “The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010.”
April 5th, 2010 at 6:37 pm
Actually Chula Vista, you’re correct. Copied from site, “The purchase date is defined as the date escrow closes.” I missed this.
IT SEEMS BUYERS CAN DOUBLE-DIP, FEDERAL & STATE TAX CREDIT FOR PURCHASES THAT CLOSE ESCROW BETWEEN MAY 1 – JUNE 30, 2010.
http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
Typically “Purchase” means date Purchase Agreement is signed… yada… Site gives it’s own definition… yada… Thank you for pointing that out, Chula Vista.
Thanks.
April 8th, 2010 at 3:02 am
Hi Alex, have any of your clients that are suppose to close Escrow this month requesting to extend Escrow into May so they can get the new State Tax Credit? I just had one of my buyers request extending Escrow on Monday.
April 8th, 2010 at 3:23 am
@ Paul – Thanks for stopping by the blog. Good to see more local San Diego agents around here.
As far as your question, that has not come up yet but it’s interesting that you mention it. It wouldn’t surprise me to see something like this come up. I didn’t really think about current escrows but the tax credit does say that it would be OK for contracts that were written up before May 1st, 2010.
April 9th, 2010 at 3:58 am
Your article on the tax credit system is good. A lot of information is covered in this. The fact that under the newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied is surely news to me. Thanks!
April 10th, 2010 at 4:38 pm
Just how is California going to pay for the credit?
If a buyer had to pay $8000 in taxes, there would be no cash back from the state. A tax credit lowers your tax bill dollar for dollar.
April 11th, 2010 at 9:33 pm
Great window of opportunity. I already bought a home last winter, wish i could have had access to something like this.
April 13th, 2010 at 6:36 am
This is a very informative post, thanks for the details but as I was going through another blog with a similar article I learned that the buyers who are not first-time home buyers may use the same time-frames to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law. The statement for the first time buyers in your post differs for the total amount of tax credits. It would be clear if you could verify the exact tax credit amount. Thanks a lot.
April 14th, 2010 at 10:03 am
It is interesting to see that California, just like the feds, is offering a credit that it can’t actually afford to give.
.-= Sam@Lake Travis Real Estate´s last blog ..6 easy tips for the Austin Mortgage Shopper =-.
April 19th, 2010 at 3:28 pm
It’s great to see that your state is doing something (anything) to pump the economy back to life. Like FDR did back in the great Depression, try it and if it doesn’t work then try something else.
April 21st, 2010 at 9:13 pm
Hi, do you think the home buyer credit will be extended? I have been trying to find some information online regarding whether this credit will be available longer and can’t find anything of substance. Also, does the CA credit expire this year or at the same time as the feds? Thanks for any answers. Will check back…
.-= Housing Crisis´s last blog ..The Best Place to Look for New Homes Austin Texas =-.
April 21st, 2010 at 9:37 pm
@ Housing Crisis, I really don’t see the Federal or California home buyer tax credit being extended especially the Federal credit as it has already been extended. We may see some other incentives for home buyers down the line but I wouldn’t count on it.
May 2nd, 2010 at 1:36 pm
I hope that the federal government will get out of the housing market and let free enterprise take over. If they do anything else, I would rather it be done on a State basis.
.-= Gated Communities´s last blog ..Harbour Crest in Tennessee =-.
May 9th, 2010 at 11:06 pm
it’s good to see that california is trying to fix their market, i would really like to eventually move to LA and do sales there! btw great blog u have here. I will follow it more often !
May 12th, 2010 at 6:44 pm
Looks like the California money is just about dried up. I know I got two buyers to take advantage of it. Now it remains to be seen if people will continue to actively buy without either a State or Federal Credit
.-= Bruce Wagg@Piedmont Real Estate´s last blog ..Oakland’s Greek Festival next Weekend in Lincoln Heights–See you there! =-.
July 12th, 2010 at 2:50 pm
Actually if you take a look at our more up to date article regarding the homebuyer tax credit extension it was extended. Also there is still a tax credit available to Californians specifically. You can read more about the california homebuyer tax credit
July 28th, 2010 at 3:06 am
This is great news. It’s nice to see the tax related geared towards that direction.Hope it continues to grow that way, giving us a sign that the economy is getting better
May 17th, 2011 at 12:37 am
Thanks for the suggestions about credit repair on all of this blog. A few things i would offer as advice to people is always to give up the actual mentality that they can buy right now and fork out later. As being a society all of us tend to repeat this for many factors. This includes trips, furniture, along with items we’d like. However, you have to separate one’s wants from all the needs. When you are working to improve your credit rating score make some sacrifices. For example it is possible to shop online to save cash or you can visit second hand retailers instead of expensive department stores to get clothing.