$18,000 California Home Tax Buyer Credit Ends April 30th

IMPORTANT: Contracts must be inked by April 30, 2010 and closed by June 30, 2010 in order to take advantage of the Federal and California Home Buyer Tax Credits Available. $18,000 California Home Tax Buyer Credit Ends April 30th.

Californians have a small window of opportunity to receive up to $18,000 in combined State and Federal Homebuyer Tax Credits. Californians must enter into a contract to purchase for a principal residence before May 1, 2010 and close escrow between May 1, 2010 and June 30th, 2010. Even if you are NOT a first-time home buyer you still may use the same guidelines and time frames 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 a home that has never been previously occupied.

Why $18,000? This is combining the Federal Home Buyer Tax Credit and the new California Home Buyer Tax Credit. There is a small window of opportunity where they will overlap during this time frame. Once the Federal Tax Credit expires you will still have the California Tax Credit. Please refer to our previous post for all the details on the New California Home Buyer Tax Credit.

The federal first-time homebuyer tax credit that is set to expire soon allows a first-time homebuyer to receive up to $8,000 in tax credits.  Contracts must be inked by April 30, 2010 and closed by June 30, 2010. This leaves you a small window to double dip and take advantage of both the California Home Buyer Tax Credit and the Federal Home Buyer Tax Credit.

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.  Other terms and restrictions apply to both tax credits so please make sure you consult a tax professional to see what would be your options and how they would be applied to your situation.

$18,000 California Home Tax Buyer Credit Ends April 30th

20 thoughts on “$18,000 California Home Tax Buyer Credit Ends April 30th”

  1. I have been looking for info on how they are allocating the funds and how they plan on paying for it and can’t find anything. I will keep looking and post it when I find something.

  2. I believe the info is mis-quoted. The Federal Home Buyer Tax Credit expires 4/30. IRS will not accept requests for reimbursement for contracts executed after 4/30. The CA State Home Buyer Tax Credit only applies to contracts that are entered into on and after 5/1. There is no overlap. It was deliberately written so that when 1 ends the next one begins.

    Both cannot be used simultaneously. Am I missing something?

    If funds were still available from the 1st CA Home Buyer Tax Credit then yes, you could double-dip. But those funds are depleted, and the next one only applies for contracts signed May and later. Federal is for April and earlier… ?

  3. The CA Franchise Tax Board says it’s the date that escrow closes, not the contract date that qualifies for the California tax credit, which means you could potentially get both credits.

    : “The New Home / First-Time Buyer Credits are available only for purchases that close escrow on or after May 1, 2010.”

  4. Actually Chula Vista, you’re correct. Copied from site, “The purchase date is defined as the date escrow closes.” I missed this.

    IT SEEMS BUYERS CAN DOUBLE-DIP, FEDERAL & STATE TAX CREDIT FOR PURCHASES THAT CLOSE ESCROW BETWEEN MAY 1 – JUNE 30, 2010.

    Typically “Purchase” means date Purchase Agreement is signed… yada… Site gives it’s own definition… yada… Thank you for pointing that out, Chula Vista.

    Thanks.

  5. Hi Alex, have any of your clients that are suppose to close Escrow this month requesting to extend Escrow into May so they can get the new State Tax Credit? I just had one of my buyers request extending Escrow on Monday.

    1. @ Paul – Thanks for stopping by the blog. Good to see more local San Diego agents around here. 🙂
      As far as your question, that has not come up yet but it’s interesting that you mention it. It wouldn’t surprise me to see something like this come up. I didn’t really think about current escrows but the tax credit does say that it would be OK for contracts that were written up before May 1st, 2010.

  6. Your article on the tax credit system is good. A lot of information is covered in this. The fact that under the 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 is surely news to me. Thanks!

  7. Whittier Homes

    Just how is California going to pay for the credit?

    If a buyer had to pay $8000 in taxes, there would be no cash back from the state. A tax credit lowers your tax bill dollar for dollar.

  8. This is a very informative post, thanks for the details but as I was going through another blog with a similar article I learned that the buyers who are not first-time home buyers may use the same time-frames 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. The statement for the first time buyers in your post differs for the total amount of tax credits. It would be clear if you could verify the exact tax credit amount. Thanks a lot.

  9. @ Housing Crisis, I really don’t see the Federal or California home buyer tax credit being extended especially the Federal credit as it has already been extended. We may see some other incentives for home buyers down the line but I wouldn’t count on it.

  10. I hope that the federal government will get out of the housing market and let free enterprise take over. If they do anything else, I would rather it be done on a State basis.
    .-= Gated Communities´s last blog ..Harbour Crest in Tennessee =-.

  11. montreal remax agent

    it’s good to see that california is trying to fix their market, i would really like to eventually move to LA and do sales there! btw great blog u have here. I will follow it more often !

  12. This is great news. It’s nice to see the tax related geared towards that direction.Hope it continues to grow that way, giving us a sign that the economy is getting better

  13. Jermaine Sherdon

    Thanks for the suggestions about credit repair on all of this blog. A few things i would offer as advice to people is always to give up the actual mentality that they can buy right now and fork out later. As being a society all of us tend to repeat this for many factors. This includes trips, furniture, along with items we’d like. However, you have to separate one’s wants from all the needs. When you are working to improve your credit rating score make some sacrifices. For example it is possible to shop online to save cash or you can visit second hand retailers instead of expensive department stores to get clothing.

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