Tax Credit for New Home Purchase Update
This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.
California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) the new home is purchased.
California law provides that $100 million is the maximum allowable for this tax credit allocated by FTB. FTB Form 3528-A, Application for New Home Credit, [no longer available, as of July 3, 2009] must be completed and submitted by FAX to us within seven days of the close of escrow to apply for this credit. We will review applications and allocate credit on a first-come, first-served basis. Once $100 million has been allocated, the tax credit will no longer be available.
To claim the credit, the buyer must receive a credit allocation letter from us. The buyer should refer to Publication 3528 (available by 12/2009) for complete instructions on claiming the credit.
As of June 24, we have received a total of 10,633 applications and have allocated a total of $102.6 million in credits for the new home purchases. As shown in these numbers, we have reached $100 million in new home credit applications. Because many of these are duplicates, revision, or invalid, we plan to accept 12,000 applications. This will ensure we have more than enough valid applications to allocate the full $100 million. These additional applications will be approved based on the availability of remaining credits.
See our website for complete information, including updates on applications received and allocation of the credit.