California Tax Credit for New Home Purchases

A new California tax credit is available for new home purchases between March 1, 2009 and February 28, 2010. The credit applies only to homes that have never been occupied. The tax credit is equal to 5% of the purchase price, up to a maximum credit of $10,000. Qualifying taxpayers need to act fast, because the credit is available on a first-come, first-served basis until the $100 million budgeted for the credit has been used up. Within one week of the close of escrow, certain forms must be completed by both the buyer and seller, and faxed to the Franchise Tax Board. Taxpayers who are allocated a portion of this credit will claim the credit on their tax returns starting with the year the home was purchased. For more information, including how to fax in the application to be allocated the credit, please visit the FTB website here.