$10,000 Tax Credit for Buyers! Breaking Down the New Home Tax Credit
March 19th, 2009 Categories: For Buyers, Real Estate, Real Estate News
To flush out the new homes on the market, California is offering a tax credit for qualified buyers who, between 3/1/09-3/1/10, purchase a qualified residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.
California allows the new home buyers a total tax credit amount equal to the lesser of 5% of the purchase price, or $10,000. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (max is $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.
California has allocated $100,000,000 for this tax credit. Buyers must apply for the credit within seven calendar days after the purchase/close of escrow. Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once the $100,000,000 has been allocated, the tax credit will no longer be available.
A qualified principal residence is defined as a single-family residence, whether detached or attached, that has never been occupied and is purchased to be the principal residence of the taxpayer for a minimum of 2 years and is eligible for the property tax homeowner’s exemption.
What is an acceptable property type? Any of the following can qualify if it is a principal residence and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a co-op, a houseboat, a manufactured home, or a mobile home. (Note: A home constructed by the owner/taxpayer is not eligible for the New Home Tax Credit because the home has not been “purchased.” )
Who is a qualified buyer? Any taxpayer who purchases a qualified principal residence.
For additional info and the details about how to apply for the credit (timing, forms, fax number, etc.), please click here and consult your tax professional.
Note: Thank you for Steve Kenilvort & Elly Carleton with First Capital for helping break down this tax credit.
