California announced it’s own, $10,000 tax credit for any homeowner buying a new home between March 1, 2009 and March 1, 2010 regardless of whether they’re a first-time buyer or not. This comes on top of the federal first-time home buyer tax credit of $8,000 announced by the Obama administration as part of the federal stimulus package. Unlike the federal bill the California home buyer tax credit does not have restrictions on income qualifications, nor do you need to be a first time buyer to participate. The only restriction is that the home be new construction and be purchased between March 2009 and March 2010.
While it is still unclear exactly how the California Home Buyer Tax Credit program will work, here is what we do know:
- Eligible on NEW homes purchased between March 1, 2009 and March 1, 2010 (must be new construction to qualify)
- $10,000 credit paid in 3 annual installments of $3,333. Home buyers get the $3,333 off their taxes for the first three years after purchasing the new home.
- No income restrictions, meaning that all home prices and incomes can participate.
- Any home buyer buying a new home qualifies. You do not have to be a first-time buyer as in the Federal Home Buyer Tax Credit.
- Pending escrows or recent home sales have not been determined to be eligible at this point, although it will be determined shortly.
- The total credit is $100 million (h/t CR) which works out to 10,000 home sales that would qualify under the California Home Buyer Tax Credit program.
Politics aside, this seems like a bad idea for Santa Clara Valley. We have a fundamental problem of high supply and low demand in Santa Clara Valley, a very high proportion of which are older homes. This may take away buyers from those older homes and pursuade them to buy into new developments that should never have come to be.
From all the new developments out there: Summerhill – Village Square, Shea Builders – Mondrian, Shea Builders – Boulevard, Toll Brothers Verona, KB – Cannery Row, KB – Monte Vista, AXIS, Regency Homes – Gables End, Regency Homes – Altaire, 360 Residences, The 88, and City Heights. There have been price drops and incentives some better than others.
As a home buyer for a new development make sure you understand that you can write your own offer and negotiate the terms and conditions of what the builders sales department are quoting you. If you are not a good negoitator make sure your agent is, so you can get the best deal out there.