Included in the recently passed California 2009 Budget is a $10,000 tax credit for purchasers of new or previously unoccupied homes. The credit is sound fiscal policy since a new home purchase generates an estimated $8000 more in taxes than the credit costs the state.

Details of the how to get the tax credit are still being ironed out, but at the moment it looks as though the developer will need to issue a certificate to both the Buyer and the Franchise Tax Board (California’s State Income Tax).

To qualify for the credit the home has to be purchased between March 1, 2009 and March 1, 2010.

There is a caveat (isn’t there always) the bill set aside $100 million for these tax credits or the first 10,000 new homes sold, which will be issued on a first come first serve basis. Once that money is gone, so is the credit. No word on how long that credit will last but based on figures from last months new development sales – an estimated 29,458 statewide, the fund could be exhausted as quickly as June of this year.

Details that are known are as follows:

1. The tax credit is for new homes only purchased March 1 2009 – March 1, 2010. You will not qualify for the state tax credit if you buy an existing re-sale home or condo.

2. The tax credit is good for 5% of the home’s price or $10,000, whichever is less. So, if you purchase a home worth $200,000 or more, you qualify for the full, $10,000 tax credit.

3. If your tax credit is $10,000, you will receive a tax credit of $3,333.33 each year for three years.

4. Unlike the $8,000 federal tax credit, the California state tax credit is not limited to first-time home buyers.

5. There are no maximum income limitations so any buyer purchasing a previously unoccupied home can qualify for the tax credit.

6. The tax credit only applies if the purchased home is your primary residence.

7. The $10,000 state tax credit can be used along with the $8,000 federal tax credit for home buyers. If you’re a first-time home buyer, and you purchase a new home in California that costs more than $200,000, you’ll get $18,000 in tax credits.

8. The tax credit is limited to the first 10,000 new home purchases.

Click here to take a look at the Senate Bill on the home purchase tax credit.

From all accounts the bill was passed in large part due to a Republican State Senator Roy Ashburn and a lot of work from Signature Properties who have more than one new development in California that stand to benefit…

This entry was posted on Wednesday, February 25th, 2009 at 11:38 pm and is filed under SB 15XX, Tax Credit for New Developments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.