A rare, limited-time “double-dipping” of federal and state tax credits offers California first-time homebuyers up to $18,000 in federal and state tax credits. Existing homeowners can qualify for tax credits up to $16,500.
“It’s a one-time opportunity,” said Debbie Lintao, a mortgage advisor for Century 21 Mortgage. “I don’t think it will happen again.”
The perfect storm of opportunity is due to the overlapping of the federal first-time homebuyers tax credit of $8,000, or $6,500 for long-time owners of existing homes. Both types of buyers must have a written, binding contract by April 30 and close escrow by June 30.
The second-part of the two-month opportunity is a new California homebuyers $10,000 tax credit program beginning May 1 and continuing on to July 31, 2011, with an enforceable contract signed no later than Dec. 31, 2010. First-time homebuyers of existing homes qualify, as do existing homeowners purchasing new or previously unoccupied homes as their principle residences.
The state programs have allocated $100 million to each category of homebuyer. The programs will end by the set deadline date, or sooner if the tax credits are exhausted. A previous and similar program it ran out of tax credits eight months before the June 2009 deadline.
“I’ve got people calling me, ‘I want to get this tax credit. What do I have to do?’” she said.
Alderson said the timing of the incentives are perfect for the spring and summer months. “Kids are out of school and families are more likely to move during the period,” she said.
Jack Dhaliwal, a Realtor at Century 21 M&M in West Sacramento, stressed homebuyers will need to hustle to claim the state tax credit.
“It’s first come, first served,” he said. “I don’t think it will last very long. It ran out last year.”
Cindi Robbins, a Vacaville-based Century 21 M&M Realtor, said the real pressure would be collecting on the federal tax credits with the requirement of signing a contract by April 30 and closing escrow by June 30.
“You have to be on your game to close in 30 days. I can do it because I have the experience,” said Robbins, a former broker assistant and escrow coordinator.
One of her marketing strategies is to mine her files and the office’s files for past clients that purchased homes in 2000-2004, before home prices wildly jumped.
“I’m looking for someone wanting a bigger house that cost less than when they bought their house,” said Robbins.
Mortgage advisor Lintao, noted while homebuyers will have to rush to get a share of the tax credits, they still need to be good consumers.
“It’s not a benefit unless you get the right house,” she said, “because you’re going to live in it a long time.”
EDITOR’S NOTE: There are many fine points, exceptions and details to both the federal and state tax credit programs. Is it highly recommended you contract a Century 21 M&M Realtor to discuss your individual situation.
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