Great news! Gov. Schwarzenegger signed Assembly Bill 183 into law on March 25, 2010, providing millions of dollars to Californian’s purchasing a home in 2010 and 2011.
Overview: AB 183 provides $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010 and on or before December 31, 2010, OR who purchase a qualified principal residence on or after December 31, 2010 and before August 1, 2011 pursuant to an enforceable contract executed on or before December 31, 2010 will be allowed to take the credit.
The Credit Amount: The credit is equal to the lesser of 5% of the purchase price or $10,000, in equal installments over three consecutive years. Purchasers will be required to live in the home for at least two years or forfeit the credit which means it must be repaid to the State of California.
The Difference in AB 183 versus Last Credit: Unlike last year’s legislation, AB 183 adds a tax credit for purchasing an existing home by a first-time homebuyer. As you may recall, the State ran out of money at the end of June, 2009. So, enjoy the low interest rate environment and consider leveraging this State homebuyer tax credit!
Info source: CAR, 3/25/10