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Buy a New Home, Get Income Tax Credit From State of California

This post was written by jd on March 26, 2009
Posted Under: Real Estate

tax

In order to help the construction industry and sales of newly constructed homes in California, a $10,000 tax credit is now available for reducing California State income tax. The home, either attached or detached, must be a principal residence and have never been occupied. As of March 18, 2009, 1,189 applications have been received. This represents, if all the applications are approved, $11,599,825 in tax credits. There is $100,000,000 available, so if you are going to buy a brand new house that’s never been in lived in, hurry and get your application in. Once the $100,000,000 is claimed, there will be no further tax credits.

Here is part of the text from the Franchise Tax Board:
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“This tax credit is available for qualified buyers  who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence  that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

California allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from us. Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available. Please check this page for updates on the allocated and remaining credits available.

California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.

Qualified Principal Residence/New Home:

A qualified principal residence means a single-family residence, whether detached or attached, that has never been occupied and is purchased to be the principal residence of the taxpayer for a minimum of two years and is eligible for the property tax homeowner’s exemption.

Types of residence: Any of the following can qualify if it is your principal residence and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.

Owner-built property: A home constructed by an owner -taxpayer is not eligible for the New Home Credit because the home has not been “purchased.”

To apply and for further information go to Franchise Tax Board”

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