The U.S. government’s home buyer tax credit was extended to April 30, 2010 and may not be extended again. This tax credit can benefit first-time home buyers up to $8,000 and current homeowners up to $6,500, provided they meet certain guidelines. And because this program is a tax credit – it does not have to be repaid. You apply for this credit when you do your tax return. Of course, it is always in your best interest to seek the advice of a Tax Attorney or your CPA to find how these credits fit your particular needs.
The California tax credit is a little different in that you must apply for the credit within 14 days of closing escrow and you are only eligible to take one third of it per year (for three years). The tax credits are available for taxpayers who purchase a qualified principal residence on or after May 1, 2010, and before January 1, 2011. Additionally, these tax credits are available for taxpayers who purchase a qualified principal residence on or after December 31, 2010, and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010. The purchase date is defined as the date escrow closes. Taxpayers may apply for the tax credits if they have entered into a contract before May 1, 2010, as long as escrow closes on or after May 1, 2010.
These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased. The tax credits are nonrefundable and unused credits cannot be carried over.
There has never been a better time to take advantage of this tax credit because many Sonoma County Properties seem to be priced below market value.
For any questions on Real Estate here in Sonoma county, contact us!
Sonoma County Properties: 7 Generations of Buying and Selling Real Estate in Sonoma County.
