HOMEBUYER TAX CREDIT
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FEDERAL
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CALIFORNIA
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Amount of Tax Credit
|
10% of purchase price not to
exceed
$8,000 for First-Time Homebuyers or $6,500 for Long-Term Residents.
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5% of purchase price, not to
exceed
$10,000 for first-time homebuyers or buyers of properties that have
never
been occupied. (See also Maximum Credit for All Taxpayers.)
|
|
Date of
Purchase
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By June 30,
2010, but taxpayer must enter into a written binding contract by April
30,
2010.
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From May 1,
2010 to July 31, 2011, but an enforceable contract must be executed by
December 31, 2010.
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Principal Residence
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Yes. Property purchased must
be the
taxpayer’s principal residence which is generally the home the
taxpayer lives
in most of the time (26 U.S.C. § 121).
|
Yes. Property purchased must
be a
qualified principal residence and eligible for the homeowner’s
exemption from
property taxes (Cal. Tax & Rev. Code § 218).
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|
Type of Property
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House, condominium, townhome,
manufactured home, apartment cooperative, houseboat, housetrailer, or
other
type of property located in the U.S.
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Single-family residence,
whether
detached or attached.
|
|
Eligibility
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1. First-Time
Homebuyer: Up to $8,000 if buyer (and buyer’s spouse if any) has
not
owned a principal residence during the three-year period before date
of
purchase; OR
2. Long-Time Resident: Up to $6,500 if buyer (and buyer’s
spouse if
any) has owned and used existing home as a principal residence for 5
of the
last 8 years.
|
1. First-Time
Homebuyer: Up to $10,000 if the buyer (and buyer’s spouse
if any, according
to FTB) has not owned a principal residence during the three-year
period
before date of purchase; OR
2. Never-Occupied Property: Up to $10,000 for a principal
residence if
the property has never been previously occupied as certified by the
seller.
|
|
Income Restriction
|
Yes. Tax credit begins to
phase out
for modified adjusted gross income (MAGI) over $125,000 (or $225,000
for
joint filers). No tax credit at all for MAGI over $145,000 (or
$245,000 for
joint filers).
|
No
|
|
Maximum
Purchase Price
|
$800,000.
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N/A
|
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Refundable
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Yes. Any amount of the tax
credit
not used to reduce the tax owed may be added to the taxpayer’s tax
refund
check.
|
No
|
|
Repayment
|
No repayment required if the
buyer
owns and occupies the property for at least 36 months after purchase.
|
No repayment required if the
buyer
owns and occupies the property for at least two years immediately
following
the purchase.
|
|
Multiple Buyers
(not married to each other)
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Tax credit may be allocated
between
eligible taxpayers in any reasonable manner.
|
Tax credit must be allocated
between
eligible taxpayers based on their percentage of ownership.
|
|
Maximum Credit for All
Taxpayers
|
N/A
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$100 million for first-time
homebuyers and $100 million for never-occupied properties, both on a
first-come-first-served basis.
|
|
Reservations
of Credit
|
N/A
|
Yes. Buyer
may reserve credit before close of escrow for a property that has
never been
occupied by submitting a certification signed by buyer and seller
stating
they have entered into an enforceable contract between May 1, 2010 and
December 31, 2010, inclusive.
|
|
When to Claim
|
Full tax credit may be
claimed on
2009 or 2010 tax returns.
|
1/3 of total tax credit may
be
claimed each year for 3 successive years (e.g. $3,333 for 2010, $3,333
for
2011, and $3,333 for 2012).
|
|
Tax Agency
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Internal Revenue Service
(IRS).
|
Franchise Tax Board (FTB).
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How to File
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First-Time Homebuyer Credit
and
Repayment of the Credit (IRS Form 5405) to be filed with tax returns
|
Submit application to the FTB
to
obtain Certificate of Allocation. The FTB may prescribe additional
rules and
procedures to carry out this law.
|
|
Other Restrictions
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Cannot be an acquisition from
related persons as defined; cannot be an acquisition by gift or
inheritance;
and buyer cannot be a non resident alien.
|
Cannot be an acquisition from
related persons as defined; buyer or spouse must be 18 years old;
buyer
cannot be another taxpayer’s dependent; credit is allowed for only one
qualified principal residence; and credit allowed cannot be a business
credit
under Cal. Tax & Rev. Code § 17039.2.
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|
Legal Authority
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26 U.S.C. section 36.
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Cal. Rev. & Tax Code
section
17059.1 (as added by Assembly Bill 183).
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Date of Enactment
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November 6, 2009 (as
revised).
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March 25, 2010.
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More Information
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IRS Web site at http://www.irs.gov/newsroom/article/0,,id=
204671,00.html.
|
FTB Web
site at http://www.ftb.ca.gov/
individuals/ New_Home_Credit.shtml. |