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Tax News State’s First-Time Buyer Credit Almost Gone

As of June 15, 2010, we estimated receiving more than 15,000 applications claiming more than $78 million. Because many of these applications are duplicates or invalid, we plan to accept at least 28,000 applications to ensure all $100 million is credited.

We will announce the cut-off date on our website, giving at least 24-hours notice for applicants to fax their documentation. The credit will be allocated on a first-come, first-served basis using the date and time stamp on the fax. But, submission before the cutoff does not guarantee a credit; we will stop allocating credits once the $100 million is exhausted.

The First-Time Buyer Credit is expected to assist roughly 17,500 qualified buyers who purchase a qualified principal residence. A first-time buyer is someone who did not own a principal residence for the preceding three years. The home must be purchased (close escrow) on or after May 1, 2010. The buyer must reside in the home for at least two years immediately following the purchase date. This credit is equal to the lesser of five percent of the purchase price or $10,000.

To apply, Form 3549-A, Application for New Home / First-Time Buyer Credit, must be completed by the buyer and faxed, along with the final settlement statement, to us at 916.855.5577 within two weeks (14 calendar days) after the close of escrow.

California homebuyers still have time to qualify for the state’s other $100 million home tax credit for the purchase of a new home. The New Home Credit is available for taxpayers who purchase (close escrow) a new home after May 1, 2010, and before August 1, 2011, as long as they enter into an enforceable contract executed before January 1, 2011. The seller must certify that the home has never been previously occupied.

For more information, go to ftb.ca.gov and search for 2010 Home Credit.

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