This is not a good news for first time home buyers in San Francisco Bay Area and rest of the state. CA state tax credit of $10,000 for First Time Home Buyers has reached the $100 million limit.
Background – In April this year California government made the $10,000 tax credit (or 5% of the purchase price whichever is less) available to qualified buyers who purchased a qualified Principal Residence that has never been occupied,after March 1, 2009 and before March 1, 2010. The buyer must reside in the new home for a minimum of 2 years immediately following the purchase date. The government had allocated a budget of $100 million for this credit.
Current Status – State of CA Franchise Tax board posted on its website on 6/26/09 that it has reached $100 million in new home credit applications. However, it says many of it could be duplicates, revised or invalid. And hence they plan to receive up to a total of 12000 applications. At current rate they would reach this limit in the week of July 6, 2009. That will ensure they have enough valid applications to allocate the full $100 million. These additional applications will be subject to the availability of remaining credits. They expect to complete processing of all certificates in August.
How to apply –
- Within one week (seven calendar days) after the close of escrow:
- The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.
- The buyer will complete Parts II & III of Form 3528-A.
- The escrow person, on behalf of the seller and buyer, will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer.
- Fax is the only delivery method that will be accepted and considered for credit allocation by FTB, as the date and time stamp on the fax will determine the order in which credits are allocated. The date and time applications are received may not be reviewed in any administrative or judicial proceeding.
- Fax only one completed application per residence with all qualified buyers listed. Do not include information on nonqualified buyers. An incomplete application may delay or prevent credit allocation.
- Do not fax the application to FTB before escrow closes.
- Do not fax the application to FTB more than once.
- Escrow companies should only send one application per fax transmission.
- The buyer keeps a copy of the completed Form 3528-A for their records.
- The Form 3528-A is now available online as a fillable form. Simply fill in all required information, print the form, and sign. If you fill out the form by hand, please print numbers as clearly and neatly as possible using CAPITAL LETTERS and staying between the lines.