Sunday, March 22, 2009

Golden State homebuyers hit tax credit mother lode

California offers first-time homebuyers a $10,000 tax credit on top of a similar, but more liberal federal first-time homebuyer tax credit of $8,000. It's like the mother lode of tax credits for first-timers in the Golden State.

Irony: IRS hand-holding helps homeowners pay fewer taxes

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - Fast-moving first-time homebuyers in California can come up with as much as an $18,000 tax credit for buying a home this year.

"Fast-moving" is the operative word.

Along with a federal tax credit of up to $8,000 for qualifying homebuyers (for both new and resale homes), qualified homebuyers in the Golden State can pad their tax savings with an additional $10,000 credit if they buy a newly-built California home.

Legislators packed California's newly approved budget with the last minute, small windfall for qualifying home buyers.

Here's the deal.

• You must purchase your new home as a primary residence between March 1, 2009 and March 1, 2010.

• Your tax credit is the lesser of 5 percent of the purchase price or $10,000 on a new single-family home or condo built in California. Resale homes are not eligible.

• You don't get the tax all at once. The state will take $3,333 off your state taxes beginning the year of the purchase and for the next two years.

• You'll have to stay put for two years or more or you'll loose the credit.

• You'll have to move fast. The funding for the tax break is limited to $100 million dollars. For example, at $10,000 per tax payer, the funds would be depleted after 10,000 taxpayers qualified. First come, first served.

Again, move fast. You must complete the required tax break application within just one week after the close of escrow.

By March 18, 2009, California's Franchise Tax Board (FTB) had already received nearly 1,200 applications for the tax credit amounting to what could be $11.6 million in tax breaks.

For more details, including the application procedure, talk to your tax professional and visit California's FTB online or call 1-888-792-4900.

• Get more less taxing breaking news that really hits home from the DeadlineNews Group.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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