Califonia offers Buyers a tax credit

Many of you may have heard that California is offering 5% of the homes value up to $10,000 tax credits to Buyers who purchase a new home between March 1 2009 and March 1 2010. This sounds like a great plan, but they left out a few details that are important for you to know before making that purchase.

First is it is only good for brand new construction homes never lived in before. This does not include condo conversions or manufactured homes, according to my sources.

Second, it only helps the builders and developers. It may spur a little employment, but does nothing to calm the foreclosure on existing homes.

Third, there is only $100 million allocated to this credit. Once the funds are spent, that is it. This means approximately the first 10,000 people to buy a new home gets the credit.

Fourth, the credit can only be claimed on the buyers 2009 or 2010 tax returns and can not be retroactive to 2008 like the Federal tax credit.

Fifth, you must live in the home for at least two years or you have to pay back the tax credit.

Sixth, the tax credit will be paid out over three years, not just one. This means 2009, 2010, & 2011 or 2010, 2011, & 2012.

Seventh, unlike the Federal tax credit, there is no limit on income level to qualify and you do not have to be a first time buyer.

Eighth, you don't want to wait. It was estimated that over 29,000 new homes sold in January 2009. That means if everyone that closes on a new home in march applies for the credit, the funds will be exhausted and the program done by the end of the first month.

If you have been waiting for the right time to buy, now is it. There is a possible 18,000 reasons why you should buy today and not keep waiting. There has never been a better time to buy real estate then today, and you won't find a better time again in possibly the next 10+ years.