California New Construction/Home Tax Credit

California New Construction/Home Tax Credit

The Copland Team specializes in New Construction and Development and this new tax credit creates a great incentive to buyers and builders of new residential contruction.

Below are the guidelines for the New Contruction Tax Credit for the State of California. This is a great opportunity of Buyers to extend their options a little farther. This tax credit will allocate $10,000 credit for buyers who purchase a new contruction/home.

*This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.


How to apply

• Within one week (seven calendar days) after the close of escrow:
  The seller must complete Part I of Form 3528-A,

Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.

The buyer will complete Parts II & III of Form 3528-A.

The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB Fax is the only delivery method that will be accepted.

The Form 3528-A is now available online as a fillable form. Simply fill in all required information, print the form, and sign. If you fill out the form by hand, please print numbers as clearly and neatly as possible using CAPITAL LETTERS and staying between the lines.

Application processing
The buyer will receive notification of credit allocation from gov.

• An allocation of credit will not be issued if:
  The home has been previously occupied.
  The application is not received within one week after the close of escrow.
  The application is received after the total credits available ($100,000,000) have been allocated.
  
• Requirements of the credit
  The home must:
  Be a single-family residence, whether detached or attached.
  Never have been previously occupied.
  Be occupied by the taxpayer for a minimum of two years.
  Be eligible for the property tax homeowner’s exemption.For over three successive taxable years, the total credit allocated among owners that occupy the home must not exceed $10,000. (Multiple qualified buyers that occupy the home will be allocated credit based on the amount paid and their percentage of ownership.)
  Any credit that reduced tax on a tax return must be repaid if the buyer does not occupy the home for at least two years immediately following the purchase date.
  FTB may request documentation to ensure buyers have complied with the requirements of the credit.
  
• Claiming the credit
  The buyer must receive an allocation of credit from us to claim the credit. The credit allocation letter will state the amount they can claim listed by tax year.
  The buyer should refer to Publication 3528 (available by 12/2009) for instructions on claiming the credit.
  The buyer must claim the credit on an original timely filed return, including returns filed on an extension.
  Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately, in which case each spouse is entitled to one-half of the credit, even if their ownership percentages are not equal. For two or more taxpayers who are not married/RDP, the credit amount will have already been allocated to each taxpayer occupying the residence on their respective credit allocation letter.
  If the available credit exceeds the current year net tax, the unused credit may not be carried over to the following year.
  The credit is not refundable.

*Info. Extracted From CA.gov