Monday, June 29, 2009

Mother lode $18,000 tax credit for Californians about tapped out

NO! Stop that baad pool peeing!
Legislation-in-limbo likely won't pour more money into the ground-breaking new home buyer tax credit in California, even though the credit has been a savior for thousands of buyers.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - California homebuyers who want the maximum $18,000 combined federal-state tax credit for buying a home this year are just about out of time as the Golden State runs out of cash, leaving only the smaller federal tax break.

Nearly 20,000 Californians who have qualified for the Golden State's new home buyer tax credit -- a maximum of $10,000 -- may have also enjoyed the maximum $8,000 federal first-time home buyer tax credit -- together an $18,000 tax credit and one of the best New Deals of the Great Recession.

But, by June 24, California had allocated $45 million of the credit's budgeted $100 million and had received applications for more than $100 million.

The state tax credit program was financed by a state budget perennially beleaguered by partisan in-fighting and lethargic legislative procedure -- not unlike the federal government during the Bush Administration.

As claims against the few-months-old state tax credit mounted, two pieces of state legislation designed to pump more time and money into the state credit -- SB 49 by Sen. Robert Dutton (R-Rancho Cucamonga) and AB 765 by Anna Caballera (D-Salinas) and Jose Solorio (D-Santa Ana), were parked in legislative purgatory.

On June 26, DeadlineNews.Com learned from sources inside both Dutton's and Caballera's offices that the bills were either in "suspense" or "awaiting committee assignment" -- often a death knell for wannabe law.

California new home buyer tax credit

To qualify for the $10,000 (single, married filing jointly) California tax credit, you needn't be a first-time home buyer, but you must buy a new, never-occupied California home -- single-family detached, condo, coop unit, manufactured or houseboat.

• You must also purchase the home as your primary residence between March 1, 2009 and March 1, 2010 and apply within a week of closing.

• You get the tax credit over three years, one-third of the credit each year.

• Stay put for two years or you must repay the credit.

For updates, visit California's Franchise Tax Board.

Federal first-time home buyer tax credit

For the maximum $8,000 (singles, married filing jointly) federal tax credit you must

• Never have owned a home or have not owned a home in the past three years.

• Purchase a new or resale home -- single-family detached, condo, manufactured or houseboat -- as your principal residence in 2009.

• Have a modified adjusted gross income (MAGI) of $75,000 or less (singles), $150,000 (married taxpayers filing a joint return). The tax credit falls incrementally for buyers with larger MAGIs. It disappears at $95,000 or $170,000.

• Keep your home for three years, or repay the credit.

More info? Search "First-Time Homebuyer Credit" on

• Click on the keywords below for more stories on this subject.

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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 the first Examiner to cover three beats for the news service:
National Offbeat News Examiner
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