Buying a Home in Los Angeles – California Home Buyers Tax Credit Will Run Out Soon

If you are thinking of buying a home in Los Angeles now is the time to buy.  The California first time home buyers tax credit is due to run out soon.  The new home buyers credit will last longer.

If you have tried to file and found the fax lines busy the Franchise Tax Board suggest trying outside hours when the lines may be less congested.  Make sure that all the pages go through and keep a copy of the confirmation.

Some points to consider:

First time home-buyers:  you must close escrow after May 1, 2010 but you may have entered contract before May 1.
New home buyers:  you must have entered contract after May 2, 2010

Credits are limited to the lesser of 5% of the purchase price or $10,000 to be taken at the rate of $3,333 per year starting in the home was purchased for 3 consecutive years.

If you are buying a home in Los Angeles you may only apply for one tax credit and if you qualify for both the new home credit will be applied.

You will not qualify for the credit if a new home credit was applied in 2009.
If you or your spouse is related to the seller you will not qualify.

If you qualify for the new home tax credit you may request a reservation to keep your place in line if you entered a contract after May 1, 2010.  You cannot request a reservation for the first time buyers credit.

Visit the Franchise Tax Board for more information.

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