As of this past week, over fifteen thousand buyers had applied for over 78 million dollars in credits, which is almost 80% of the one hundred million that has been designated for these credits…this in only six weeks of availability of the funds. In 2009, there was a comparable tax credit available, which also went rapidly.
According to a spokesperson from the California Franchise Tax Board, at the present rate of approximately three thousand applicants each week, the entire 100 million dollars that is to be had may well run out by the first of July.
In order to qualify for the credit, purchaser has to have their escrow closed between this past May 1st and January 1st of next year. They may not have been the owner of a primary residence for at least the past three years. The credits are given on a first come basis to buyers whose escrows have closed during the specified time frame.
Another 100 million dollars is available for this year to both first time purchasers and so-called "move up" purchasers who buy a newly constructed home as a primary residence. These tax credits can be held in reserve when a purchase contract is signed and redeemed when escrow closes. Escrow must close prior to August 1st of next year, 2011.
The maximum amount of the tax credit is ten thousand dollars or 5% of the purchase price, whichever is the lesser of the two. Generally, applicants have qualified for five thousand seven hundred dollars in credits.
