Under the enacted California law , a homebuyer may receive up to 5 % of purchase price , not to exceed $ 10,000 in tax credits . California law generally allows buyers of never occupied properties to reserve their credits before closing escrow . The program runs from May

1 , 2010 to July 31 , 2011 , but an enforceable contract must be executed by December 31 , 2010 .

The tax credit program applies to single-family residences , whether detached or attached . There is no income restriction or maximum purchase price . There is no repayment required if the buyer owns and occupies the property for at least two years immediately following the purchase . Multiple buyers ( not married to each other ) will receive the tax credit based on their percentage of ownership .

There are some reservations of credit , however . A buyer may reserve credit before close of escrow for a property that has never been occupied by submitting a certification signed by buyer and seller stating they have entered into an enforceable contract between May 1 , 2010 and December 31 , 2010 , inclusive .

When to claim : 1 / 3 of total tax credit may be claimed each year for 3 successive years ( e . g . $ 3,333 for 2010 , $ 3,333 for 2011 , and $ 3,333 for 2012 ). Submit an application to the Franchise Tax Board ( FTB ) to obtain a Certificate of Allocation . The FTB may prescribe additional rules and procedures to carry out this law .

The state of California has allocated $ 2.5 billion for this tax credit . For more information : First Time Buyer website at www . ftb . ca . gov / individuals / New _ Home _ Credit . shtml .

Source : C . A . R . Homebuyers Tax Credit Chart

By Marta Dinsmore , Realtor Intero Real Estate Services www . MartaDinsmore . com 408.840.7420

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