Time running out for homebuyers seeking credit

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Contra Costa Times
By: Eve Mitchell
August 9, 2010

First-time homebuyers of existing homes who want to take advantage of a state income-tax credit worth up to $10,000 have until Aug. 15 to turn in their applications.

As of last week, the Franchise Tax Board had received more than 31,000 applications, a number that is above the $100 million funding limit. But because some applications are invalid or duplicates, the board will continue to accept applications until the Sunday midnight deadline. The idea is to ensure that enough valid applications are processed to allocate the full $100 million set aside for the credit, which is expected to help from 17,500 to 20,000 first-time buyers of existing homes.

The board expects to start sending out credit certificates later this month to qualified applicants.

The credit, worth up to $10,000 over a three-year period, applies to homes that close escrow on or after May 1 and can be used by two groups of taxpayers: First-time and repeat buyers of new homes and first-time buyers of existing homes. The upcoming deadline applies to first-time homebuyers of existing homes, said board spokeswoman Denise Azimi.

Buyers of new homes with a purchase contract signed between May 1 and Dec. 31 can reserve a credit, but then must close escrow by Aug. 1, 2011, to obtain the credit. There is another $100 million in funding for new home credits, which to date have received more than 11,000 applications.

"If you are a first-time buyer of a new home, you go into the new home (funding side)," Azimi said.

Most first-time buyers of existing homes have probably already turned in their applications after closing escrow, said Michael Tessaro, a Realtor with East Bay brokerage J. Rockcliff Realtors. "We don't really see a flurry in the marketplace," of last-minute applications, he said.

Tax credits are limited to either 5 percent of the purchase price or $10,000, whichever is less. The home can be a single-family house, condominium, townhouse, houseboat, manufactured home or mobile home.

For more information about the tax credit program, call 1-888-792-4900 or visit www.ftb.ca.gov .

The fax number to send applications to is 1-916-855-5577.

Contact Eve Mitchell at 925-952-2690

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