Starting May 1, buyers who haven't owned a home in the previous three years and buyers of new homes will both become eligible for a $10,000 state tax credit. To fund the credit, the state allocated $100 million for each category of buyer. The legislation says that homebuyers have until Dec. 31 to claim the credit, but in an e-mail to its members on Friday, the CAR said that the money will be gone 10 to 20 days after the start date.
Simplified math is as follows: $100 million of $10,000 tax credits allows for 10,000 new homebuyers. The CAR projects 64,000 sales statewide in May, a modest drop from the previous year, but still about 9.5 percent of the anticipated total sales for the year.
But he didn't account for the possibility that some homebuyers who may be delaying their April closing dates into May, to claim both the $8,000 federal credit and the credit from California, which could cause the fund to dry up even faster.
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