As I talked about this on Monday March 22, here is a follow up to the California home buyer tax credit…

By: Tina Stern

On Monday, the legislature passed AB 183 (Caballero & Ashburn) which would provide $200 million for home buyer tax credits. The Governor is expected to sign AB 183 into law before the end of the week.

AB 183 is designed to help stimulate the economy and create jobs.  The bill allocates $100 million for qualified first time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit. This credit is equal to the lesser of 5% of the purchase price or $10,000, taken in equal installments over three consecutive years. Under AB 183 purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit (i.e. repay it to the state).

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