Receive up to $18,000 in state and federal tax credits

Home buyers have a golden opportunity to potentially receive as much as $18,000 in state and federal income tax credits. Please note there are separate tax credits and separate criteria for both.

The state of California has set aside $100 million in bonds to stimulate the purchase of brand new never lived in homes. Buyers can receive up to a $10,000 state tax credit, with the main criteria is that the home is brand new, it must be owner occupied, and you must live in the home for two years. You do not have to pay any portion of the tax credit back. You do not have to be a first time buyer either. This allocation of funds is only available on a first come first served basis and when the money is gone, so will the tax credit. For more info visit the Franchise Tax Board website: www.ftb.ca.gov

The federal government as part of the stimulus package is an $8000 tax credit, however unlike the state credit, the federal credit applies to first time buyers only and is available on homes purchased between January 1, 2009 before December 1, 2009. Single taxpayers with income up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. The home does not need to be brand new to qualify for the federal tax credit. A resource is www.federalhousingtaxcredit.com for more information.

Hypothetically, if you are a first time buyer purchasing a brand new home who makes at or below the qualifying income could take as much as $18,000 in state and federal tax credits. This, along with low interest rates, is a terrific incentive to be in the housing market.

It is always a good idea to get tax advice prior to making a purchase.