CALIFORNIA HOME BUYER TAX CREDIT
On March 25, 2010 Gov. Schwarzenegger signed the Homebuyer Tax Credit legislation into law, Assembly Bill 183.

FIRST TIME HOME BUYER TAX CREDIT
AB 183 will provide $100 million for home buyer tax credits for qualified first-time home buyers of existing homes.

NEW OR PREVIOUSLY UNOCCUPIED HOMES
AB 183 will provide $100 million for home buyer tax credits for qualified purchasers of new, or previously unoccupied, homes.

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. 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).

Nearly 40 percent 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 C.A.R. research conducted last year. 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.

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