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*New* Tax Credit Available

by The Moerler Team


 Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits. 

 To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive. 

 Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010. 

 Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied. 

 The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits.

 For more information, C.A.R. offers a Homebuyer Tax Credit Chart with a side-by-side summary of the federal and California laws.  C.A.R. also offers a legal article entitled Homebuyer Tax Credit Update.


Tax Credit Boosts Economy

by The Moerler Team

According to Broderick Perkins, a new survey reveals that savvy consumers cashing in on the new and improved homebuyer tax credit are helping fuel economic recovery.

 The vast majority of current homeowners say they would spend the expanded version of the homebuyer tax credit on repaying existing debts, home improvements, savings and investments and household expenses, according to a National Association of REALTORS survey of 1,000 homeowners.

 Consumer spending, of course, is the real fuel for the nation’s economic engine.  And much consumer spending is fueled by the housing market—provided the housing market is energized.

 The new law extends the existing credit for first-time homeowners, worth up to $8,000, through April 30, 2010

 A new credit of up to $6,500 is available to qualified existing homeowners who buy a new primary residence by April 30, 2010, if they owned their existing home for five consecutive years over the last eight years.  Second homes don’t qualify.

 The maximum allowed home purchase price is $800,000.

In my over 30 years as a successful local Realtor, I have not seen such favorable times to purchase a home.  Interest rates are at an all time low with fixed rates less than 5%.  Home prices in many areas are back to 2003-2004 prices.  Many more people can qualify and opportunities are plentiful.

 The survey also found, after learning about the tax credit expansion, 20% of those surveyed said they were more likely to consider purchasing a home than they were six months ago.

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Contact Information

Photo of The Moerler Team, CalBRE 00774777 Real Estate
The Moerler Team, CalBRE 00774777
Keller Williams Westlake Village, CalBRE 01523573
30700 Russell Ranch Road Suite 200
Westlake Village CA 91362
(805) 376-2999
(805) 377-9933