$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, request a Homebuyer
Tax
Credit Chart with a side-by-side
summary
of the federal and California laws. Through the California Association
of
Realtors, your Realtor can also provide a legal article entitled Homebuyer
Tax
Credit Update-ask for yours today.