First Time Home Buyer Tax Credit & New Home Tax Credit: These programs begin on May
1, 2010 and are available to any taxpayer that purchases an eligible principal residence
on or after May 1, 2010, and before January 1, 2011.
Tax Credit Form: 3549-A (seller completes – II, III, IV & buyer completes – I, V,
VI), fax the application and settlement papers to 916.855.5577
The amount of the tax credit is equal to 5% of the home’s purchase price up to $10,000;
$100 million has been allocated to each program (est. $200 million total). Tax credits
are dispensed on a first come first served basis and each taxpayer is only allowed
one tax credit (even if you qualify, you can’t receive a tax credit of more than
It’s a tax credit that must be used over 3 successive tax years beginning the year
in-which the house was purchased – $3,333 in tax credits each year. If the taxpayer
does not use any portion of the tax credit in any year, credits do not “rollover”
and are non-refundable. If you build your own home, it doesn’t qualify.
**Important: Your credit application must be faxed and it will be denied if it’s
submitted on an ’09 form or if they receive the application before May 1st, 2010
or before the home closes escrow.
You are not eligible if you received a new home tax credit in 2009, if you or your
spouse are related to the seller, if you’re under 18*, or if you’re a dependent of
another taxpayer in the same year as the home’s purchase.
New Home Credit Details
A new home qualifies if it’s an attached or detached single-family residence (even
a house boat) that has never been occupied. The home must be eligible for the state’s
homeowners’ property tax exemption and the buyer must occupy the home as a primary
residence for 2-years immediately after the purchase.
First-time Buyer Credit
A home qualifies if it’s an attached or detached single-family residence (house boats
too); the home must be eligible for the state’s homeowners’ property tax exemption
and the buyer must occupy the home as a primary residence for 2 years immediately
after purchase. A home buyer is eligible if they haven’t owned a home in California
for 3-years prior to the purchase date.
Answer to a Frequently Asked Question: “If the buyer is married on the date of purchase
and either the buyer or the buyer’s spouse/RDP had an ownership interest in a principal
residence during the preceding 3 year period, the buyer does not qualify for the
First-Time Buyer Credit even if the spouse/RDP is not going to be on title.” from
the Franchise Tax Board’s 2010 Tax Credit for New Home / First-Time Buyer web page.
**Important: You may not receive the tax credit if the Franchise Tax Board does not
receive the application and settlement statement 14 calendar days after close of