The government is doing anything it can to get the real estate market moving again. The federal government is offering a tax credit for home buyers.

The state of California just did the same. For a very short window, the two overlap. If you time if right, you could get the federal tax credit and the California state tax credit for buying a home.

First, you would have to sign a contract to buy a home by April 30th, 2010 and close by June 30th. Make sure you qualify under both programs. Here are the details.

Federal Home Buyer Tax Credit

First time home buyers are eligible for an no prescription propecia $8,000 tax credit. If you have not owned any real estate in the last three years, you qualify as a first time buyer. Repeat buyers can get a $6,500 tax credit. This is a tax credit, not a deduction. Whatever your final IRS bill is, subtract $8,000 or $6,500. If you don’t pay that much, you’ll get the credit anyway in the form of a refund. You get it all the first year, so if you buy a home before the deadline, the credit will apply to your 2010 federal income tax.

This credit applies when you buy a primary residence, whether it’s a resale or new construction. It’s expiring soon, though. You must sign a contract by April 30th and close escrow by June 30th.

California Home Buyer Tax Credit

The new 2010 California home buyer tax credit also applies to the purchase of a primary residence. First time home buyers can get the credit whether they buy an existing home or new construction. Repeat buyers are eligible for the same $10,000 credit, but only if they buy a brand new home.

This is also a credit, not just a deduction, which means you get a dollar for dollar reduction of your state income tax liability. Unfortunately, this is not a refundable tax credit. You can apply $3,333 to your state taxes for three years, beginning the year you purchase the home. If you don’t pay $3,333 in state taxes each year, you won’t be able to take full advantage of this credit. This doesn’t necessarily mean that you owe the state $3,333 on April 15th. Your annual tax bill includes funds withheld from your paycheck. Look at “tax owed” on your state tax return. This credit is available on homes closed after May 1, 2010 until funds run out.

Other things to remember

These amounts are maximums. The federal tax credit is actually 10% of the home’s value, up to $8,000 or $6,500. If you buy a home for less than $80,000 (unlikely in many parts of California!), then your credit is capped at less than $8,000. Also, the maximum value is $800,000.

The California tax credit is 5% of the purchase price, up to $10,000. If you buy a home priced under $200,000, your credit will be capped at 5% of the value.

There are some other criteria, such as caps on income. If things look good so far, read the specifics of each tax credit. Cialis Better yet, contact a tax professional and make sure you’ll qualify before you rely on the money.
The window to take advantage of both credits is very limited, and lenders are very busy. Find a lender and start the loan application process as soon as possible. Collecting bank statements, tax returns and other documentation can be time consuming.

This combination of tax credits and low interest rates will probably never happen again. If you are in a position to buy a home, this is your golden opportunity.

Author Bio: Written by Coleen Bennett Chula Vista New Homes San Marcos New Homes New Homes San Diego

Category: Tadalis SX Real Estate
Keywords: california and federal home buyer tax credits, can i get both home buyer tax credits