California Housing Tax Credit
California housing tax credit is given to a taxpayer who has purchased a house but has not stayed in the same for some reason. This person gets a tax credit of 5% on the price of the house purchased or gets $10000 or whichever amounts to a lesser figure. This is calculated between March to February of every year.
The California housing tax credit program is implemented recently and has also been enforced in the current session 2009-2010. If you buy a house for around $2,00,00 then the tax credit that would be applicable on the same would be $10000. One of the best things of this tax credit program is that there is no minimum amount of income required to be eligible for the same, which means all the people are at least eligible to apply for the tax credit program. This program, increases the savings and also helps encourages the prospective home buyers to invest in an affordable housing as fast as possible. This is also a government of America initiative as this makes more and more people to buy houses in the country.
California Tax Credit 2010
Government of California has made the tax credit accessible for the ones who would buy a proper residence either on or after May 1st 2010, and before 1st January 2011. Coupled with this, these tax credits are accessible to those people who invest in a residence on or post 31st December 2010 and before 1st August 2011.
The date of purchase would be given out as the escrow closes. As a taxpayer you can apply for the credit if you have already made a contract prior to 1st May 2010. This is applicable as long as the escrow ceases on or after May 1, 2010.
Tax Credit Limits
California Tax Credit 2010 limits are less than 5 per cent of the buying price or $10,000 for a proper residential complex. As a tax payer under this new system you should apply the sum total tax credit in equivalent sums, over 3 recurrent tax years.
New Home Credit Rules
Under the clause of the new home credit a qualified housing or residence needs to adhere to the following points:-
* It needs to be a single family residence, whether attached or separated. The same can be a portion of a co-operative project, or a condo, a complete manufactured home, a boat house. It can also be the mobile homes that are prevalent in California. However, a residence that is built by the tax payer will not qualify as the home has not been purchased.
* It needs to qualify for the California property tax homeowner’s exemption.
* Needs to be occupied by the taxpayer as their main housing plot for a period of 2 years, immediately after buying it.
Allocation of the Tax Credit
Under the new California Tax Credit 2010, tax credit allocation certificate can be issued by the following clauses. Some of them are:-
* The seller should never ascertain that the house has been empty.
* In case the application form is received post the tax credits have been allocated, then the allocation would be nullified. The determination of FTB might not be appealed.
First Time Buyer Credit
An eligible residence in order to procure the First- Time Buyer Credit needs to adhere the following:-
* The house has to be occupied by the individual tax-payer as their primary residence for two years minimum after they bought it The house must be eligible for the California homeowner’s property tax exemption.
* The residence can be single family one, mobile homes, house boat, condominium and so on. If the same is built by the tax payer then it does not qualify for the credit.
Ways to claim the Tax Credit
Under the new California Tax Credit 2010, in order to claim the tax credit the there are certain criteria that need to be adhered to. They can be summarized as below-
* It is imperative that the tax payer receives an allocation certificate form so that he can claim the tax credit in their personal accounts.
* The tax payer needs to adhere to the new tax claim policies of 2010. All the relevant instructions need to be followed. Tax credit cannot be refunded.
* The tax credit might not bring down the regular tax.