California Homebuyer Alert: New CA Tax Credit Could Run Out In A Few Weeks

The California Association of Realtors (CAR) predicts that the money allocated for the CA first-time homebuyer credit may run out in 10-20 days once the program starts on May 1. This is what CAR said:

“The $100 million allocated for California’s first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.’s Economics team. California’s Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied. However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.

C.A.R.’s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters. It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above. Applications for the California tax credit must be faxed to the Franchise Tax Board after escrow closes. The FTB will update its website when the 2010 application form and other information become available.”