The Federal tax credit is gone. However, California enacted a new first time (FTB) and "Brand New" Home Buyer Tax credit 5 percent of the purchase price or a maximum of $10,000 that began on May 1, 2010 that requires you to act now because the credit will only be available on a first come first serve basis. $100 million was allocated to FTB's and $100 million was allocated for buyers of New, never lived in, home buyers.
While these credit are available for taxpayers who purchase a qualified principal residence until the end of the year, the California Association Realtors® expects "the money will be used up very quickly".
Besides the limited funds, another issue that has come to light is the refunds are divided over 3 years and applied towards what the home buyers owe in state taxes. So many taxpayers may not be able to utilize the entire credit, if they don't owe as much as the credit. Taxpayers should consult their tax accountants to see how to take full advantage of the tax credit.
Please see the State of California Franchise Tax Board website for more detailed information.
So if are wondering if now is the time to buy a home and take advantage of the tax credit. Now is definitely the time, before the money runs out.
--Virginia Hall
ABR, CRS, e-Pro, GRI, SFR
Coldwell Banker Residential Brokerage
Direct (619)258-8585