State Tax Credit FAQ

How much is the state tax credit?
The state tax credit is for $10,000 or 5 percent of the purchase price of a newly built home, whichever is less. The home must be the principal residence of the buyer for at least two years following the purchase, and the sale must close between March 1, 2009 and March 1, 2010.

How does the tax credit work?
• A tax credit of up to $10,000 credit (5 percent of home price or $10,000, whichever is less) for the purchase of a newly constructed, previously unoccupied home.

• Available March 1, 2009, until March 1, 2010, or when funding authority runs out – whichever comes first ($100 million was allocated to program).

• Allocated by the state's Franchise Tax Board (FTB) on a first-come, first-served basis (details still to be worked out).

• Paid out to home purchasers over three tax years in equal amounts (i.e. $3,333 for 2009, $3,333 for 2010, etc.).

• Purchasers must reside in the home for at least two years.

• There are no income limitations that have to be met by purchasers.

• There is no first-time homebuyer requirement.

• There is no repayment requirement (unless the purchaser sells, rents out, etc., before two years expire).

Complete Information:        http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml