There is a small window of opportunity for first time homebuyers to get a combination federal and state tax credits of up to $18,000 (state tax credit is for California). Please make sure those in your life know about this!
Federal Tax Credit Rules: (up to $8000 tax credit)
- Must be in contract by April 30, 2010 and must close by June 30, 2010
- Modified Adjusted Gross Income limit for single filers: $125k; for joint filers: $225k
- The home must remain as your primary residence for a minimum period of 3 years
California State Tax Credit Rules: (up to $10,000 tax credit)
- Begins May 1, 2010 (can close escrow 5/1 and after) and ends January 1, 2011 or until the funds for the program have been exhausted
- Home must be used as your primary residence
- No income limitation
- Credit is the lesser of 5% of the purchase price or $10,000
- Credit is provided over a 3-year period
- The home must be occupied as your primary residence for a minimum of 2 years
For the state tax credit, $1,000,000 has been allocated for existing homes and $1,000,000 for new home sales. The funds are provided on a first-come first-serve basis and the program will end either on 1/1/11 or when the funds run out, whichever comes first.
If you’re on a house hunt, the benefit of finding the right home and getting into contract is that much more appealing if it happens prior to 4/30.
