New California First-Time Homebuyer Tax Credit

With the Federal Tax Credit expiring on April 30, 2010, Governor Schwarzenegger saves the day by signing AB 183 into law.  The new first-time homebuyer tax credit becomes effetive on May 1, 2010.    It will be on a first come, first serve basis and when the $200 million runs out the credit is over.  Unlike the previous state tax credit which applied only to new residences, this credit will be split equally between new (previously unoccupied homes) and existing homes.   This website will discuss how the credit affects Escondido real estate purchases, but the same rules would apply to other San Diego North County real estate sales. 

First of all to qualify for the first-time homebuyer tax credit, you must be a first-time Escondido home buyer.    The amount of the tax credit on your Escondido home purchase is limited to 5% of the Escondido home for sale price or $10,000, which ever is smaller.  You will receive you tax credit over three consecutive years.  To be eligible you must purchase a qualified Escondido home between May 1, 2010 and December 31, 2010.   If you enter an enforceable purchase contract before December 31, 2010, it must close escrow before August 1, 2011 to qualify.   Again, when the money runs out the program is over.

The new California first-time homebuyer tax credit is expected to have a very positive impact on the Escondido home economy and around the state.  Nearly 40% of first-time home buyers said they would not have purchased without the Federal tax credit.  The California credit is expected to provide similar results.   For more information about tax credits, contact Gary Harmon, your Escondido Realtor.