Now, is the time to invest in real estate, take advantage of tax credits and own your own home in Southern California….
Today, Governor Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. AB 183 will provide $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 Start Date is May 1st, 2010
- The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit.
Requirements for the California Home Buyer Tax Credits
- The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).
Tax Credits Help First Time Home Buyers Buy
- 40% of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to the California Association of Realtors research conducted in 2009.
The state’s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner. Unlike last year’s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.
AB 183 will significantly contribute to the effort to stimulate jobs-creation within California’s housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon and returned to the lender, or have been sitting on the market for extended periods of time. It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.
We encourage you to get pre-approved for a home loan before you start viewing homes in person. Lending requirements and criteria has changed a lot in 2009 and 201o. The smart thing to do is to get your financial plan in order in the beginning. Then, you know how much you qualify to purchase which creates a greater confidence for you and gives you an advantage other buyers when you are competing for a property. If you need a few good lender referrals, call us at 800-300-6126.
This has been great news for first time home buyers! The market is been finicky but I know those first timers are itching to see what deals come out of the foreclosures still being processed.