California homebuyer tax credit 2010

California homebuyer tax credit of $10,000

California AB 183, authored by Assembly member Anna Caballero (D-Salinas) and Senator Roy Ashburn (R-Bakersfield), will provide a tax credit of up to $10,000 to Californians eligible for this tax credit. AB 183 was passed by the legislature on March 22, and the governor signed the bill into law on March 25.

“I have been up and down the state pushing this important housing bill that will get people off the fence and into homes while creating jobs and stimulating our economy – and today I am proud to take action and put it into law,” said Governor Schwarzenegger at a signing ceremony where new homes are being built in Fresno.

The California homebuyer tax credit provides a tax break of 5% of the purchase price of a home up to the maximum of $10,000.

Those eligible for the tax credit are Californians who have not owned a home in the last 3 years and those buying a pricipal residence.

This new law gives the California Franchise Tax Board authority to extend a total of $200 million in tax credits to California homebuyers; $100 million for buyers of new, unoccupied homes and another $100 million for first-time buyers of existing homes.

California homebuyer tax credit applied over 3 years

The homebuyer tax credit will be extended from May 1, 2010 to December 31, 2010. The tax credit will be available to buyers on a first-come, first-served basis and is applied in equal amounts over a period of three taxable years. To qualify, the buyer must not be a dependant and must purchase a home that does not belong to a relative.

This is the second California homebuyer tax credit. The first one was passed in February 2009 and allocated $100 million for the tax credit. The money for that tax credit ran out after just four months with 10,659 Californians claiming the credit, according to the California Franchise Tax Board.