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Apparently, as part of the new budget that increased taxes on everyone there is a tax credit for people who purchase brand new homes.  This means that the home cannot be occupied previously by anyone.  This seems like it would be a boost to home builders.

Here are the specifics:

1) The home has to be brand new, but the tax credit applies to all buyers who intend to live in the home.  You do not have to be a new  homebuyer to qualify.

2) There is no income limit to qualify for this tax credit.

3) You have to close escrow on the home between March 1, 2009 and Feb 28, 2010.

4) There is a total of $100 million assigned to this credit, so that means only 10000 homes will qualify.  It is first come first serve by closing date.

5) You have to live in the home for at least 2 years and you will receive the $10000 in 3 installments of around $3,333 each for the next three years.

6) This tax credit can be combined with the Federal Tax credit of $8000 for new home buyers.

This tax credit actually makes me quite angry because right now California is not even paying tax refunds to people who qualify.  Now they want to use all this extra money to help home builders sell homes?

Additionally, there is a very small supply of new homes here in the Bay Area so I do not see this helping many people here.  This is definitely beneficial to some friends we know in Southern California, where the markets have a glut of new homes that are not selling.

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compare viagra priceson 02.26.09 at 4:20 pm

[...] This is a new rule that was passed with the new budget.  If you want to read some details I wrote a post about it here. [...]

compare viagra priceson 02.26.09 at 10:30 pm

if a first time buyer eligible for the $7000 first-home tax credit (i think) thru June or July 09, does that mean a first-time buyer who buys a new home in California (this is comedy folks–you can’t make this stuff up) is eligible for $17,000 in tax credits in 2009? That sounds too good to be true,
cheers, Rich

compare viagra priceson 02.27.09 at 6:14 am

Considering how fast home prices are dropping, anyone who takes this credit is a fool. Home prices (both median and average) dropped 9% in one month (Dec->Jan.) Do the math, and you’ll quickly see that this $10,000 credit would be erased by equity losses within a month or two on most houses.

I also agree that this is a ridiculous way to spend government money. Why should we subsidize people who can’t do math?


compare viagra priceson 02.27.09 at 11:01 am

Rich, yes if a buyer qualifies for the $8000 federal tax credit then they can double dip. I wrote this in the article.

compare viagra priceson 03.04.09 at 7:19 pm

That makes me sick! I can’t believe what this nation is turning into. How does it make sense to tax everybody so that one smaller group can benefit.

*breathing fire*

I am just so tired of all of this. I suppose we’ll just have to wait and see the real ramifications of what all of this does for our economy. Right now it’s not making me too happy and seem socialistic.


compare viagra priceson 03.05.09 at 9:37 pm

I recently moved to London UK two months ago. London does have higher taxes then the U.S.
But then again, in London we are not facing any economic crisis as of now.

I know, everybody in this web site might be suffering from the economic crisis you are all facing, but I am not. The job that I have in London pays enough to support your family and be able to pay UK taxes. The economy of the UK is quite different then the economy of the U.S.

If you are afraid on going poor and losing your house due to the economic crisis, you could do what I did and move out of the country. In parts of London, you could buy a house that is less expensive then the houses of California.

Don’t worry, I steal love the U.S. and I will be visiting the U.S. every two months. By the way, The job that I have in London, you get two months of vacation. That’s a blast.

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