Will the California Home Buyer Tax Credit Run Out Quickly?
California allocated $100 million for first time home buyer tax credits and another $100 million for those that buy homes that have never been occupied. The credits for the new homes are not limited to first time buyers. All these homes must close escrow between May 1, 2010 and December 31, 2010.
Although the home buyer tax credit is not set to expire until the end of the year, C.A.R., the California Association of Realtors® is forecasting that the money for first time buyer tax credits will run out between 10 and 20 days after the tax credit begins. This forecast is based upon estimated closings for the month of May.
C.A.R. also suggests that if some buyers who were to close in April move their closing to May to qualify for the tax credit, then the money might run out even more quickly.
Given this forecast, if you want the opportunity to qualify for this credit, it may be best to close your escrow as soon as possible after May 1, 2010.
I am not an accountant nor do I have any training in tax preparation or tax credit, and this is not intended to be advice regarding taxes or the tax credit. Please contact the IRS or a qualified tax professional for advice.