State halts tax-credit program...
California is cutting off applications for a tax credit that was designed to promote sales of new homes.The Franchise Tax Board said it would stop taking applications for the tax credits at midnight Thursday.The program offered $100 million in credits to about 10,000 consumers who buy homes that have never been occupied. The credit is equal to 5% of the purchase price or $10,000, whichever is less.
Buyers must occupy the homes for at least two years immediately after the purchase.The tax board expects to have received 12,000 applications.
But help is on the way …
AB 765 (Caballero) Income tax credit: purchase: principal residence.
Analysis
The Personal Income Tax Law authorizes a credit against the taxes imposed by that law in an amount equal to the lesser of 5% of the purchase price or $10,000 in the case of the purchase of a qualified principal residence on and after March 1, 2009, and before March 1, 2010, but not to exceed an aggregate limitation of $100,000,000 for all credits allowable.
Existing law requires a certification that the residence has never been occupied be provided to the Franchise Tax Board within one week of the sale of the qualified principal residence. This bill would allow a taxpayer to reserve a credit with the Franchise Tax Board and would require that the certification be provided to the Franchise Tax Board within one week of the close of escrow of the qualified principal residence. This bill contains other related provisions.
