2010 California Tax Credit for First Time Buyers and New Home Purchases

California has a new tax credit for New Home and First-Time Buyers who buy a home that closes May 1, 2010 to Jan 1 2001. A more realistic end date is until they run out of the $100 million budget. This might not be very long as the 2009 credit ran out of funds quickly. The credit could stimulate some home purchases in the lower-end Oakland real estate market but I am not sure if it will have much effect on Piedmont homes for sale.
The state credit is slightly different from the $8000 Federal Tax Credit that will expire at the end of this month. The refundable federal credit went directly to the buyer when they filed federal income taxes. The non-refundable California credit will be a credit towards California income taxes due and is spread over a 3 year period with a limit of $3,333 per year. You will need to have a healthy income tax bill to use up the credit every year.  As an example, if you pay $2500 in California taxes in 2010 you will get a check back from the state for $2500; if you pay $150 in taxes you will get only $150 back. If you are a first time home buyer you might not be paying a whole lot of California taxes once you deduct the interest payments. The state is banking on the fact that not every buyer will be able to use all of the $10,000 credit.

Only one credit will be allowed per buyer and requirements including being over 18 and not being a dependent of another taxpayer in the year of purchase. To qualify for the New Home or First-time buyers credit, the home must be occupied by the buyer as their principal residence for a minimum of 2 years.  

Posted by Bruce Wagg on


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Good information...I'm wondering if New Mexico did the same type of incentive it would help stimulate our sales which in turn will help stimulate the local economy. Many people go to work when just one home is sold.

Posted by Carlos Martinez on Wednesday, May 5th, 2010 at 7:18am

Congratulations on getting a brand new (and quite generous!) tax credit for the CA housing market. We certainly don't have one tenth the problem CA has and yet we feel saturated with distressed properties, REOs, short sales, and pre-foreclosures. Boy could we use another tax credit to clear out all the unsold inventory! Anyway, I know CA needs it a whole lot worse than WI does. Best of luck and happy selling, Bruce! P.S. That's a great looking site you got there! :-D

Posted by Madison foreclosures on Tuesday, May 11th, 2010 at 6:48pm

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