San Jose Short Sales

California lawmakers extend a $10,000 tax credit to first-time buyers and those purchasing new homes or abandoned and foreclosed homes (none occupied homes).

Signed by Gov. Arnold Schwarzenegger this week, the new law provides $200 million for homes purchased between May 1 and Dec. 31 and between Dec. 31 and Aug. 1, 2011.

The funds will be allocated on a first-come-first-served basis. The credit is not a refund — like a federal incentive program for first-time home buyers that ends next month — but will result in a reduction or elimination of state taxes over a three-year period. There are no income limitations and buyers must reside in the home for at least two years.

Governor Schwarzenegger today announced his 2010 proposals for California.  Included in the proposals is a recommendation to set aside $200 million for a new round of $10,000 state tax credits for first-time home buyers.  The proposal expands upon the initial $10,000 state tax credit by including both new and existing homes.  Last year’s tax credit applied only to new homes.

The tax credit could be combined with the recently extended and expanded federal tax credit for home buyers.