Good news for real estate agents in California – a new home and first time home buyer tax credit has been approved and it will run from May 1st until the end of the year or whenever the funds are exhausted. The cap for the tax credit has been set at $100 million for all new home buyers and first time home buyers who will become eligible to receive it. Overall, the tax credit for your homebuyers could equal up to 5% of the purchase price or $10,000, whichever is less. The credit will be awarded in equal parts over three years with no payment exceeding $3,333.
With the recent success of the federal tax credit, it is a perfect time for California to extend a similar credit. Nationwide home sales saw an increase in March and analysts point to the end of the federal tax credit as an explanation. Hopefully, California will see similar results.
Like all previous tax credits, there are certain stipulations and exceptions in order for homebuyers to receive the credit, so be sure to visit the State of California Franchise Tax Board to make sure you are prepared to help your homebuyers take advantage of the tax credit. Additionally, since their is a cap to the credit, it’s important to act fast. So get your homebuyers moving towards their next home!
NOTE: If your buyers took advantage of the 2009 California home buyer tax credit, they will not be eligible for the similar 2010 credit. For more information remember to visit the State of California Franchise Tax Board.