Today, the Governator or Governor Schwarzenegger signed Assembly Bill 183, the Home buyer Tax Credit legislation, into law.
More details to come but here are the basics:
- First Time Home Buyer Program
- Must buy a principal residence, i.e a home to live in and owner-occupy.
- Must live in the residence for the next 2 years at least.
- Tax Credit is the lesser of either 5% of purchase price or $10,000
- Credit given in equal installments over 3 years.
- Must close escrow between May 1st 2010 and December 31st, 2010 OR enter into contract before December 31st, 2010 and close escrow by August 1, 2011.
- In other words, you need to be in escrow in 2010 to qualify.
- This time around, the home buyer tax credit is for either new construction or the resale of existing homes.
- Warning: The state’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire.
From the California Association of Realtors, “AB 183, formerly SB 4 of the sixth extraordinary session (Ashburn), is part of a package of four bills, passed at the request of the Governor, designed to help stimulate the economy and create jobs. The bill allocates $100 million for qualified first time home buyers of 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% 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).”