Janet Guilbault, a mortgage lender in Contra Costa County, sent out this information about the newly enacted State of California homebuyer tax credit.
As with all information of this type, you need to get tax advice from your tax professional, and know that the money set aside for this will be snapped up quickly and the pot is likely to be dry soon.
Should you buy a house because of these tax credits? NO! But if you are planning to buy soon, you should be aware of them and see if they fit your situation.
If EVER there was a reason to get off the fence and BUY YOUR HOUSE in California, this is it. We're talking a once in a lifetime, 24 karat golden opportunity to have the government subsidize your home purchase for up to $18000 in tax credits.
But the window of opportunity is EVER so brief if you are going to attempt to double dip and get both the state and the federal tax credits.
Here's how the double dip works: The federal home buyer tax credit for first time buyers states you must be in contract to buy your house by April 30th and close before June 30th to be eligible for the credit.
But a newly enacted California stimulus for home buyers actually OVERLAPS the federal first time home buyer tax credit!
You can also receive $10,000 in tax credits as a first time buyer, from the State of California for transactions that CLOSE after May 1.
If you have followed me so far (and there are 18,000 reasons to pay attention and follow) you have probably figured this out:
- By being in a RATIFIED CONTRACT before April 30, you can qualify for the $8000 first time homebuyer tax credit from the Federal government (as long as it closes by June 30)
- By CLOSING that RATIFIED CONTRACT after May 1, you can qualify for the $10,000 first time homebuyer tax credit from the State of California.
Already in contract and set to close at the end of April? A delay of close until May 3 will not endear you to your Realtor or to your seller, but could qualify you for $10,000 in tax goodies (May 1 and 2 are a weekend).
If you are NOT already in a contract, you are going to need to contact a mortgage professional and get thoroughly pre-approved NOW. Make sure closing the loan before June 30th will be possible based on your situation. (60 days is NOT unreasonable for most loans).
Once preapproved, seek out a great Realtor who knows the ropes, will work FAST, and will work as a team with your chosen mortgage professsional.
Disclaimers: As a mortgage professional, I am not qualified to give tax advice. Please consult your tax advisor. Be aware there are income limitations on the federal tax return, and there could be other factors that limit your ability to receive the tax credits.
For more information, a speedy preapproval, or a referral to a great Realtor, call me at 925-552-3867.