From Our Team: California: What You Need to Know about the Governor's New Homeowner Tax Credit Bill

A new bill signed by Governor Arnold Schwarzenegger offers California’s second round of tax credits to buyers who purchase a home in the Golden State.
The bill, which allows up to $10,000 in tax credits to both new home buyers and first-time buyers of existing homes, took effect May 1 – just after the federal tax credit expired. The last round of tax credits offered by the state, which were limited to new home purchases only, were so popular that buyers depleted the initial $100,000 set aside for the program eight months before the deadline.
As a member of the Top 5 in Real Estate Network®, I, along with my team, know this new bill will help many buyers take action on a home they’ve been considering. The benefits of this tax credit are just what they need to solidify their decision. Here are the details of the new bill:

Provides a 5% tax credit, up to a $10,000 limit, to all buyers of new, never-occupied homes.
Provides a 5% tax credit, up to a $10,000 limit, to first time buyers of existing homes.
Sets aside $100 million for each program, for a total of $200 million. (This is double the amount allowed during the last program.)
Requires buyers to close escrow between May 1 and December 31 to qualify. New home buyers have until December 31 to sign a purchase contract, and then must close escrow by August 16, 2011.
Requires buyers to live in the home for a minimum of two years.
Provides for the tax credit to be paid in thirds over a three year period.
Sets no income limitations on buyers.
Requires buyers to repay the tax if they fail to live in the home for two years or fail to close escrow on a new home by Aug. 16, 2011.