And the horses are approaching the starting gate.
The State will begin accepting applications for the new home/first-time buyer tax credit on May 1st. For qualifying buyers, there is $10,000 at stake, so place your wagers early. When the money runs out, it’s gone.
Information on the program can be found at the Franchise Tax Board website. First-timers need to close escrow before making application, and rumors have it that June may be too late. But, for all of you new home buyers, be aware that you need only have signed your enforceable contract on or after May 1st, at which point you can make application to reserve your winnings. According to the FTB:
Reservations: Taxpayers who qualify for the New Home Credit may, but are not required to, reserve a tax credit prior to the close of escrow. Reservations will become important as we near the $100 million cap for homes that may not close escrow before the cap is reached, as a reservation will “hold the taxpayer’s place in line” until 2 weeks after escrow closes. To reserve a tax credit, the taxpayer and seller need to complete, sign, and fax to us a reservation request to certify that they have entered into an enforceable contract on or after May 1, 2010, and on or before December 31, 2010. A copy of the signed contract must be included with the reservation request. Taxpayers who reserve a tax credit still need to fax an application and a copy of the settlement statement within 2 weeks after the close of escrow. Taxpayers may not reserve a tax credit if the contract was entered into before May 1, 2010. We will post the reservation form and details about the process by May 1, 2010.
This got me thinking. We saw a boatload of strategic delays in closings on resale homes in April in order for already committed buyers to take advantage of the credit. Could we see new home buyers making similar pleas — for a fresh, new contract bearing the coveted May, 2010 time stamp for their committed purchases? Would the builders be willing to play ball?
Probably not, but nothing surprises me anymore.