California First-Time Buyer Tax Credit - The State Is Almost Out Of Money!

We have noticed for a while that first-time buyers were driving the home sales in the San Diego real estate market. Right now, there is a perfect storm of low mortgage rates and tax credits for first-time buyers of new construction homes in California.

The problem? California is running out of money to fund the tax credits.

Originally, $100 million was reserved for the first-time buyer tax credit, and now less than $20 million remains. If the low mortgage interest rates weren't enough to motivate buyers to buy now, perhaps the shrinking pool of tax credit money will provide the extra motivation. Plus, interest rates aren't likely to get any lower and have risen over the past week or so.

Get moving!

Here's some information on the California first-time buyer tax credit (you can read more at the California Franchise Tax Board website).

Ways to have your tax credit denied:

• Somebody has lived in the house before.
• Your application isn't received withing the first week after closing escrow.
• California runs out of money for the credit before your application is processed.

Other important pieces to note:

• The home must be a primary residence.
• The home must be a single family residence.
• You have to live there for two years.
• You'll have to return a portion of the credit if you move before two years have passed.
• California is monitoring this credit and may require proof from you at any given time.
• The credit is not refundable.

More information for first-time buyers can be found at the posting First Time Buyer Questions From San Diego. You can also SEARCH FOR SAN DIEGO REAL ESTATE here.