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S TATE OF CALIFORNIA TO OFFER NEW-HOME BUYERS $10,000 TAX CREDIT
March 3, 2009
The California state budget compromise passed this week includes a tax credit of up to $10,000 for
purchasers of newly built homes bought between March 1 and March 1, 2010 — or when funding is
exhausted, whichever comes first. The California Building Industry Association offered up some
answers about the state's new buyer incentive:
Q. How much is the state tax credit?
A. The state tax credit is for $10,000 or 5 percent of the purchase price, whichever is less. The home
must be the principal residence of the buyer.
Q. How does the tax credit work?
A. The credit will be provided in equal amounts (up to $3,333) per year, over three successive tax
years, beginning with the year the purchase is made.
Q. Will I receive the credit if I buy an existing home?
A. No. Why? Because building a new home generates more tax revenues than the credit will cost the
state.
Q. Any restrictions?
A. The taxpayer must live in the home as their principal residence for at least two years. If he/she
does not, he/she will have to repay the credit.
Q. How much money is available under the program?
A. $100 million, first-come, first-served basis.
Q. Can the credit be used in conjunction with the recently enacted federal tax credit?
A. Yes. If you buy a new home between March 1 and Dec. 31 and are a first-time buyer, you can take
advantage of both the $10,000 state credit and the $8,000 federal tax credit.
If you have questions, please contact us for more information. Thank you!
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