California Market Report 

California Market Analysis 

The $8,000 tax credit for first-time homebuyers and the $6,500 tax credit for long-time residents is about to expire. To take advantage of the Federal Tax Credit, qualified buyers must enter escrow by April 30, 2010 and close escrow on or before June 30, 2010. Now the good news for California homebuyers: under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied (new construction). The new California law applies to certain purchases that close escrow on or after May 1, 2010 and before January 1, 2011. These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over three successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits cannot reduce regular tax below tentative minimum tax (TMT). The tax credits are nonrefundable and unused credits cannot be carried over.

And yes, if you qualify for the $8,000 Federal Tax Credit and the $10,000 California Tax Credit, you may take advantage of both. To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract on or before April 30th 2010 and close escrow no sooner than May 1, 2010 and no later than June 30, 2010. The total amount of allocated tax credit for all taxpayers may not exceed $100 million for the New Home Credit and $100 million for first-time homebuyers.