When I heard the news this week that California new home buyers may receive a $10,000 tax credit, it sounded almost too good to be true. In some ways it is. Some web sites are giving out wrong information to consumers, leading California buyers to believe that they can receive an $8,000 tax credit on the federal level for being a first-time home buyer on top of a $10,000 credit on the state level, equaling a whopping $18,000 tax credit for this year. It doesn't work that way.
For starters, the $10,000 tax credit is only for new homes, and the tax credit is applied to your tax return over a three-year period, meaning a California new home buyer can deduct only $3,333 the first year. You don't need to be a first-time home buyer to qualify for this program, nor are there income limits; however, there is a $100 million limit on this credit. It applies to purchases between March 1, 2009 and March 1, 2010. If enough new homes sell this year, there won't be any money left for next year.
Second, to qualify for the $8,000 federal tax credit, a home buyer must be a first-time home buyer, and it carries income limitations. If a couple earns more than $170,000 (there is a phase-out for dual incomes between $150,000 and $170,000), the tax credit does not apply.
Please talk to your tax accountant before running out to buy a new home. Moreover, don't step foot on a builder's new home site without taking your buyer's agent with you. Sacramento home builders, like others in the state, are slashing prices to move inventory. An experienced buyer's agent can help you to get the best deal, including handling negotiation for you on all those expensive upgrades. Upgrades are where builders make the most profit, you know.
If you want to tour new homes, call your Sacramento buyer's agent, Elizabeth Weintraub, at 916.233.6759. I'll be happy to help you.
The Short Sale Savior, by Elizabeth Weintraub, coming in June 2009.
Photo: Big Stock Photo
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
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The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
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Hi Elizabeth...good post. Very clear and easy to understand - even for me. ;-) Don't step foot in a new home site? Very good...think I'll try that one; however, you are right. Buyers need to pay attention to these warnings! ;-)
Elizabeth- Great advice for potential buyers in your state. The statement of not stepping on a new home site without a buyers agent is priceless for buyers in ALL states!
Best,
Scott
Elizabeth
You have aknack for bringing out the facts that the readers should be reading about. I thank you for that, and did I ever tell you that every time I come to your post and see that amazing smile my day juts gets that much better.
Thanks Elizabeth
My brother in law is looking down in San Diego county. Will have to make sure he reads your post. Some new homes are on his list he emailed us to look at... and I don't know if his agent is up to speed like you are. Problem is the dummy signed a BBA before he told me he was in the market to buy.
My brother in law is looking down in San Diego county. Will have to make sure he reads your post. Some new homes are on his list he emailed us to look at... and I don't know if his agent is up to speed like you are. Problem is the dummy signed a BBA before he told me he was in the market to buy.
Awesome! Thank you for the heads up.
Tammy, sometimes relatives just don't think. I could write a very entertaining post about some of the knucklehead moves mine did (LOL). It's only after the fact that they sometimes call the "family Realtor," like they forget what we do until a question or problem comes along to jog their memory (LOL).
Elizabeth - great post and very good info for consumers to know.
Great point about having the buyer's agent especially for new construction. In my area, many of the builders have proprietary contracts which are very one sided!
Tammy: Carolyn is right -- some relatives don't think. They don't think HEY, my sister / father / uncle is a superstar agent, and I could ask for advice. Or maybe they do think but don't want TO DO IT ALL BY THEMSELVES, to prove that they don't need you, heh, heh. Or worse, they do decide to consult a relative who has absolutely zero experience in real estate. I see it run all gamuts.
Excellent advice Elizabeth - And in an environment where some Californians are getting IOUs instead of state tax refunds, there is an additional wrinkle. Of course the money "should" come eventually:-) I also like your comment, "If enough new homes sell this year, there won't be any money left for next year." That would be like the digitial conversion box coupon shortage caper all over again.
Hi Mryl: Well, a hundred million, at ten grand a pop, equals 10,000 first-time home buyers. That's not very many for the whole state of CA.