Chico, Ca Real Estate Blog: Two More Reasons to Buyer Now!!!

Dear Blogger,

The Federal government signed a $787 billion stimulus bill that gives an $8,000 federal tax credit to first-time home buyers buying new or existing homes. Combine with the the states $10,000 state tax credit for new construction and you could qualify for up to $18,000 in tax credits.

Here are the breakdowns...

Tax Credit vs. Tax Deduction

It is important to remember that the $18,000 tax credit is just that... a tax credit The benefit of a tax credit is that is is a dollar for dollar tax reduction, rather that a reduction in a tax liability that would only save you a small portion of the $18,000.

Federal Tax Credit: Up to $8,000, New or Existing Homes

Applies to new and existing homes purchased between January 1 and December 1, 2009. The credit is based on 10 percent of the purchase price or $8,000, whichever is lower.
The credit does not have to be repaid, provided the home remains their main home for 36 months after the purchase date.
Singles must earn lest the $75,000 a year. Married couples can qualify with join annual incomes up to $150,000.
Tax credit is for first time home buyers only. The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase.
For more details visit www.federalhousingtaxcredit.com

California State Tax Credit: Up to $10,000 for New Construction Only

Applies to new homes or condos bought as a primary residences between March 1, 2009 and March 1, 2010
Once the funds are used up, no more monies will be allocated to the fund. Currently there is $45 Million remaining of the $100 Million allocated
The state will take $3,333 off a buyers state taxes starting in the year of the purchase and for two following years
The buyer must live in the new home or condo for two years, starting from the purchase date, or lose the tax credit.
For more details visit www.ftb.ca.gov

Please consult your tax accountant for your specific information. Now is a great time to buy.

If you or someone you know is looking to buy their first home, it would be my pleasure to assist them.