On March 25 Governor Schwartznegger signed Assembly Bill 183 into law. This new legislation provides $200 million for home buyer tax credits; $100 million for qualified first-time buyers of existing homes (meaning they've been lived in) and $100 million for buyers of new homes (never been occupied).
You have to buy between May 1st and Dec. 31st this year to get the credit which is the lesser of 5% of the purchase price or $10,000 payable in equal installments over three years. (The reason it's May 1 is because the $8,000 federal tax credit program ends on April 30 and they don't want people double-dipping).
You must live in the home as your primary residence for at least two years to keep the credit. Also "first-time" means that you haven't owned a home in the last three years, it does not mean that you've never owned one.
According to our state Realtor association, nearly 40% of first-time home buyers said they bought a home only because of last year's federal tax credit so this new law is important.
Last year's state tax credit program was $8,000 and so successful that it ran out of money in June, a full eight months before it was due to expire. The 2009 bill was aimed at sales of new homes because there was such a large inventory of them. Unlike that tax credit last year however, this new one adds not only $2,000 to the tax credit amount but also dedicates half of the $200 million to EXISTING homes.
If you are looking at the classic buyers' market that we are in right now (especially here in Lake Shastina) check with your lender or mortgage broker for details and if you qualify. If you do it's like taking $10,000 off the price of a home. But don't wait too long. This program is likely to be far more popular than last year's because it includes older homes and is $2,000 more in tax credits. Remember how they ran out of money last year so get your application in early this time.
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