April 6, 2010
Let’s talk taxes. After all, April 15 is right around the corner. This year, if the idea of receiving up to $18,000 in federal and state tax credit appeals to you, buying a new home now could be less taxing – particularly if you’re a first-time buyer.
For prospective buyers who have not owned a home in the preceding three years ending on the date of the purchase (the definition of a first-time homebuyer), this could be the moment you’ve been waiting for. However; time is of the utmost essence. The current federal tax credit of up to $8,000 ends April 30. If you enter escrow on a brand new or a re-sale home on or before April 30 and close by June 30, you may be entitled to claim up to $8,000 on your 2010 returns.
Additionally, California just recently implemented a tax credit up to $10,000 beginning May 1, 2010 and before January 1, 2011. These tax credits are available for 2011, pursuant to an enforceable purchase contract executed on or before December 31, 2010 and closes before August 31, 2011. It is also offered to first-timers on either a brand new home or a re-sale.
The California tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. The total tax credit is applied in equal amounts over three successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased.
The bottom line? There is a limited-time window of opportunity – just a few weeks in fact – to seize both the federal and state tax credits by entering escrow by April 30. With so many new changes in the lending industry since the beginning of the year, you might be surprised to learn about one of the many new financial programs that could get you a home with enduring value plus the dream of tax relief.
So don’t wait. Good things are happening. Let’s talk.