A Complete Guide to the 2010 California Homebuyer Tax Credit

We Educate and Empower Homeowners to Make More Informed Decisions

The Facts About The$10,000 California

Homebuyer Tax Credits

We will begin in a moment

Online Class & Discussion Brought to you by

Broadview Mortgage Katella Branch 1-866-667-6724


California $10,000 Tax Credit Facts

The Purpose and Goals of this Class

• Purpose: To Educate and Empower Home Owners

• Goal: Eliminate confusion and misinformation about qualifying for and claiming the CA Tax Credit

• Goal: Arm you with a complete understanding of ALL of your Tax Credit Options – Fed & CA

• Goal: Leave you more informed about the landscape of today’s real estate market so you can make informed decisions



Topics We Will Cover In This Class

• Two Tax Credits in One

• A Tale of Two Qualifying Guidelines

• Ticking Time lines and Availability of Funds

• How Credit is Calculated and Claimed

• Double Dip Delight – Fed & State Sweet Spot

• Ineligible for Tax Credit if…..

• Wrap up and Take Aways

• Questions & Answers Period



Questions and Answers

• You may type questions in at any time during the presentation – Questions Box on your screen

• Home Buying experts are available to answer questions throughout presentation

• This is an interactive learning environment. You will get the most value by having your specific questions answered

• The only dumb question is the one you don’t ask

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1-866-667-6724



Two Tax Credits in One

• $200,000,000 Available for California Homebuyers

• $100,000,000 Available for “New” Home Buyers– Extension of previous tax credit

• $100,000,000 Available for “Existing” Home Buyers– Expanded beyond terms of previous tax credit

• Different Reservation Guidelines

• Different Qualifying Guidelines for Each



A Tale of Two Qualifying Guidelines

• NO First Time Homebuyer Requirement if Buying New Construction

• First Time Homebuyer Requirement if Buying Existing Home

• First Time Homebuyer Definition: Buyer must not have interest in a principle residence within the past 3 years

• A First Time Homebuyer that is also purchasing New Construction will receive credit from “New” home allocation – IMPORTANT



Ticking Time Lines & Availability of Funds

• Must Purchase (Close Escrow) After May 1st, 2010 and Before December 31st, 2010

• Or enter into an Enforceable contract executed on or before December 31st, 2010 and Closes by August 1st, 2011

• Reservations are taken on first-come-first-served basis

• Previous Tax Credit funds lasted only 3 months before exhausted



Ticking Time Lines & Availability of Funds

• AFTER the $100 Million is reserved – Get on the waiting list

• Many tax payers will not use full $10,000 credit

• Allocation of Tax Credit is reduced to 70% of available for New Construction

• Allocation of Tax Credit is reduced to 57% of available for First Time Homebuyers

• Waiting Buyers notified by December 31st, 2011



How Credit is Calculated

• Tax Credit earned is the lesser of 5% of the purchase price or $10,000

• $200,000 purchase price for full $10,000 tax credit

• Home must be primary residence

• Single family attached or detached homes only

• Credit paid back if you sell or move before 2 years

• Credit is paid in 3 yearly installments of up to $3,333



How Credit is Calculated

• Single or Joint Taxpayers due full credit

• Married filing separate returns split credit

• Tenants in Common credit split based on ownership

• Claimed on a timely filed original return for the year purchased

• Exception is credit reserved but escrow not closed until after December 31st, 2010 – Amended OK



How Credit is Claimed

• Reservation of tax credit requested by application to the Franchise Tax Board under penalty of perjury

• “New Home” - Builder / Seller must provide a joint certification that home has never been previously occupied

• Reservation may be submitted for “New” construction homes in contract but not yet closed

• Reservations for First Time Homebuyers CANNOT be made until after close of escrow




• Taxpayer submits form certifying First Time Homebuyer status with proof of purchase

• Proof of purchase (Settlement Statement) must be submitted within 2 weeks of close of escrow to be awarded credit

• Credit is not “Refundable” as is the Federal Tax Credit

• You WILL NOT receive a credit, carryover or check for any unused portion of this tax credit




• “The tax credits cannot reduce regular tax below the tentative minimum tax (TMT)”

• Consult your Tax Professional about AMT



Double Dip Delight – Fed & State Sweet Spot

• It is possible to claim both $8,000 federal tax credit AND CA State credit

• Must be First Time Homebuyer or Buy “New” if not

• Must enter into enforceable contract by April 30th, 2010 and close escrow by June 30th, 2010 for Federal

• Must close after May 1st, 2010 for CA State credit



Ineligible for Tax Credit if…..

• You’ve already claimed a CA Tax Credit

• Taxpayer is under 18 years old at Purchase

• If Taxpayer was claimed as a dependant for any other tax payer for the taxable year of the purchase

• If Home is purchased from relative – Non arms length

• or if Home is purchase from a spouse’s relative



Wrap Up and Take Aways

• Last tax credit ran out in 3 months – New Homes

• Get on Waiting List for $7,000 “New Home” Credit

• Get on Waiting List for $5,700 “FTHB” Credit

• Tax Credit Reservations can be made with executed contract if buying New Construction

• Tax Credit DOES NOT mean you will pay NO State Tax – Alternative Minimum Tax may still be owed

• Tax credit is NOT automatic – Must submit request within 2 weeks of close of escrow



Wrap Up and Take Aways

• We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs

• Give us an opportunity to earn your trust if you have not already chosen a lender

• We are more than happy to be your “second opinion” if you are already working with someone

• We can recommend a qualified Real Estate Agent in your area that shares our values and expertise

• We are committed to educating and empowering homeowners - Please join us for other classes


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For more information

1-866-667-6724Homeownership Educator

Scott SchangBranch Manager

Broadview Mortgage Corporation

A Complete Guide to the 2010 California Homebuyer Tax Credit

Real Estate

Transcript of A Complete Guide to the 2010 California Homebuyer Tax Credit