Santa Barbara Real Estate Blog

With the close of the Federal Home Buyer Tax Credit program coming up at the end of April (10 days remain), Zia Group clients have been asking about the California tax credits. Here’s a recent update from the California Association of Realtors who warns how quickly the California tax credits might go:

The $100 million allocated for California’s first-time homebuyer tax credits may be depleted in about 10 to 20 days or sooner, according to C.A.R.’s Economics team.  California’s Franchise Tax Board (FTB) plans to begin accepting applications on May 1, 2010 for tax credits up to $10,000 for first-time homebuyers and for homes that have never been previously occupied.  However, the total tax credit allocation for all taxpayers is $100 million for first-time homebuyers and $100 million for new homes, both on a first-come, first-served basis.

C.A.R.’s forecast of 10 to 20 days to deplete the $100 million allocation for first-time home buyers is based on estimated May sales figures and other parameters.  It does not take into account the possibility that buyers scheduled to close escrow in April may delay closing until May to take advantage of the tax credit. If a shift in closings from April to May occurs, the first-time homebuyer tax credits may be depleted even more quickly than indicated above.
Applications for the California tax credit must be faxed to the FTB after escrow closes. The FTB will update its website when the 2010 application form and other information become available. For more information, please refer to C.A.R.’s Homebuyer Tax Credit Chart 2010.

The Zia Group would like to remind you that we cannot and do not give tax or legal advice. You should seek specific advice from an accountant, attorney, or other professional as you deem appropriate.

Thank you for visiting the Santa Barbara Real Estate Blog, your source for updates on the Federal and State Home Buyer Tax Credits. You can find more information on our Santa Barbara real estate website or by clicking on the “Home Buyer Tax Credit” category of the blog.

Buyers considering Santa Barbara real estate have a brief window of opportunity to cash in on up to $18,000 in combined tax credits. To be eligible and obtain both federal and state tax credit, a first time home buyer must enter into a contract (principal residence) before May 1st and close escrow no later than June 30th. Most buyers are familiar with the $8,000 First Time Home Buyer Tax Credit, but should also be aware that the additional $10,000 state tax credit is divided over three years.

If you’re not a “First Time Home Buyer,” you’re still eligible to obtain up to $16,500 in combined tax credits within the same time line as above. There are specific requirements for non-first time home buyers so contact Daniel Zia if you are interested in more information. Or, click on the “Home Buyer Tax Credit” category for more blog posts on the topic.

Summerland Real Estate

Under the federal law slated to soon expire, a first-time home buyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.  Additionally, under a newly enacted California law, a home buyer may receive up to $10,000 in tax credits as a first-time home buyer or buyer of a property that has never been occupied.  The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits. (From the California Association of Realtors) Additional information can be found at the California Association of Realtors website.

Are you interested in searching the Santa Barbara MLS for property eligible for up to $18,000 in federal and state tax credits? Visit the comprehensive Santa Barbara real estate website for everything necessary to begin your search. If you have questions, post them below or contact Daniel, your Santa Barbara Realtor, by email (Daniel@ZiaGroup.com). Thank you for visiting the Santa Barbara real estate blog.

This is a Home Buyer Tax Credit question I frequently receive from clients and it focuses on Santa Barbara home buyers who have a cosigner. Pass this information on to any friends and family who are considering a purchase in the next month. The Home Buyer Tax Credit is currently set to end on April 30, 2010.

Question: Taxpayer A is a single first-time home buyer. Taxpayer B (parent) – for A and does not qualify. Both names are on the mortgage. Can Taxpayer A claim the credit and, if so, how much?
Answer: Yes, Taxpayer B is not a first-time   and cannot claim any portion of the credit, but A may claim the entire credit if the home was purchased as Taxpayer As primary residence.

This information comes from  IRS guidance. The Zia Group cannot provide tax advice and clients should consult their accountant before claiming the tax credit.

If you have a question about Santa Barbara real estate or are interested in more of the ZiaGroup’s recommended service providers, contact Daniel Zia, your Santa Barbara Realtor, at (805) 637-7148. Thank you for visiting the Santa Barbara Real Estate Blog and we hope this is a resource for you on your Santa Barbara real estate search.

Home Buyer Tax Credit - Santa Barbara

With the Federal Home Buyer Tax Credit quickly approaching its April 30, 2010 purchase agreement deadline, Santa Barbara home buyers are asking more questions. Here are two examples for those interested in the Home Buyer Tax Credit.

Q: (Existing homeowner credit) Are there any income limits for claiming the tax credit?

Answer:  Yes. For sales occurring after November 6, 2009, the income limit for single taxpayers is $125,000; the limit is $225,000 for married taxpayers filing a joint return.

The tax credit amount is reduced for buyers with a modified adjusted gross income (MAGI) of more than $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. The phase-out range for the tax credit program is equal to $20,000. That is, the tax credit amount is reduced to zero for taxpayers with MAGI of more than $145,000 (single) or $245,000 (married) and is reduced proportionally for taxpayers with MAGIs between these amounts. Source: NAHB

449 Hawk Canyon Ct

Q:  I’m an existing homeowner with a lot of equity in my home. I want to purchase a home with a non-negotiable price of $825,000. Am I able to claim any of the $6,500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount above $800,000 makes the home ineligible for any portion of the credit.

We’ve visited the Home Buyer Tax Credit topic frequently on the Santa Barbara real estate blog and have many more posts for you to browse by clicking on “Home Buyer Tax Credit” category. The Zia Group team is here to serve you and your Santa Barbara real estate and Montecito real estate needs. Contact Daniel direct at 805-679-7148 or visit our comprehensive Santa Barbara real estate website. Thank you for visiting the Santa Barbara real estate blog.