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$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes 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.
Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.  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 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits.
For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws.  C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.

Information provided by ” California Association of Realtors”

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March 31, 2010 - Posted by | Bank owned in Big Bear, Homes for Sale in Big Bear, Real Estate | , ,

2 Comments »

  1. Well, I feel cheated! I just closed YESTERDAY, and found out about this law the same day. When I called escrow, they claim to have never heard about the law. And my loan officer as well. How did they not know about this? Is there any way I can get special dispensation?

    Comment by Mike | April 15, 2010 | Reply

    • Mike,
      If you are eligible, you should be able to get the $8000 federal credit. The state credit has to close after 5/1/2010. I would check with your tax person, they should have the paperwork necessary to apply for the credit, as long as you qualify.

      Comment by Steve | April 15, 2010 | Reply


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