The state of California just passed a $10,000 tax credit for any home buyer that buys a newly built home.
I thought the state was broke? Where is this money coming from? Why only newly built homes? These are questions a lot of Californians are asking?
The state believes that building a new home generates more tax revenues than the credit will cost the state. The CBIA (California Building Industry Association) stated that a study co-authored by a former state finance director shows that, “on average, every home built in California generates $16,000 in state revenues and another $3,000 in revenues to local governments. That means that even after providing the tax credit, the state will receive a net $6,000 in additional revenues. Furthermore, the $16,000 will be generated when the home is built, and the credit will be spread over three years.”
Now, if you are a home buyer shopping for a newly built home, this is going to help you out tremendously (along with the home builders). And if you are a first time home buyer you also are eligible for the $8,000 tax credit from the federal government! $18,000 in total tax credits!!!
Here are some of the specifics behind the state tax credit.
- The state tax credit is for $10,000 or 5 percent of the purchase price of a newly built home, whichever is less.
- The home must be the principal residence of the home buyer, and the sale must close between March 1, 2009 and March 1, 2010.
- The credit will be provided in equal amounts (up to $3,333) per year, over three successive tax years. It will begin with the year the purchase is made.
- The taxpayer must live in the home as their principal residence for at least two years…. or he/she will have to repay the credit.
- State tax credits are limited to $100 million fund and is available on a first-come, first-served basis until the funds are exhausted. So it is recommended that if you are in the market for a brand new home you may not want to wait too long as the funds may run out.
If you would like to get additional information about this tax credit and find out about some of the incredible deals some of the local builders are offering home buyers in the area, click on the following link “CLICK HERE” .
