Thank you for visiting the FTB website.
AB 183 does establish a 14 day deadline to receive your application in Section 17059.1.c.1.A and also Section 17059.1.h. The 14 day deadline was an increase from the deadline for the 2009 New Home Credit which was 7 days. As for spreading information about the program there were articles in newspapers and television reports from beginning of March 2010. While all these would get the word out about the program it is the buyer responsibility to find out all the details of the program when they apply for it. The most important place we could put the 14 day deadline would be on the instructions for the application. The deadline is stated on the instructions for the application in several sections to make it clear as you fill out the application. The link you provided was just a published article not the actual bill, I have attached a copy of the bill for you to review.
Please visit our website again if we can assist you further.
Â From: Tran, Lich D
Sent: Tuesday, January 25, 2011 6:53 AM
Subject: RE: Homebuyer Tax credit unfair practice.
It was my error to complaint the FTB. I am very sorry.
Still, AB 183 is unfair and unethical assembly bill. It should be amended. I have filed my complaint to Attorney General, Governor, California Congress and also put the complaint to Internet, blogs, facebooks, twitter â€¦. as much as I can. I also asked Senator and Assembly man in my district.
This unfair unethical law may contain â€œReserving New Home Credit to benefit one specific group secretly.â€ It really is a wrong way to create a hostile environment for our society. How can we account for the fairness of a first-come, first-served basis?
Why did not reduce the amount so more people have access to the tax credit.? Why not $2000 for each?
Why was not based on Closing account Date for the first 10,000 application?
Why there was a too shot time of only two weeks? Not three months? Buying/selling a house is not the same as a car.
Thank you very much for your great service, it is not FTB false. It is the congress wrong doing.
Also I will use you your email to complaint my realtor and loan officers to BBB, FTC, and State Board because they email to encourage me to buy a house for $10,000 tax credit. And I relied on their message. But they failed to notify me the 14 days limit.
At that time most people believe that it would be the same asÂ IRS Credit for first time home owner.
I bought my first home and closed escrow account on 05/19/2010.Â My realtor as well as the escrow employees did not know about this 14 days limit to submit the application. No body told me about that until I visited FTB website on 06/07/2010. Even though, it was late 5 days, I faxed my application on that day. And my application was denied.
I believe it is unfair practice. It is unfair because it is not a first-come, first-served basis as the law said.Â I submitted application and bought a house first, but my application was denied because 14 day limit. Whereas, other homeowners bought a house after me and submitted application after mine, but their application were approved.
FTB should announce clearly and widely on radio, TV, not only on its website and should allow the time enough for the information reach the recipients.Â Â Â
FTB should do more and clear because normal people may assume it is the same as IRS.Â What do you think if the Right to speech have a limit "you cannot critize the government?" like Chinese communist?
If you visit this web site on 03/26/2010 you can see no info about 14 days limit law of FTB.
1. the contract date for this credit is irrevelent, the escrow just needs to close on/after May 1st (and before Dec 31) and a borrower CAN collect both Fed and State tax credits.
2. The CA credit must be an arms length transaction, can't purchase from a family member!
there you have it!
Feel free to contact me if you have any more questions!
best regards, Jeff Marr
The first part of what Sophie quoted was the requirement for receiving the credit. It is crystal clear that, date wise, the close of escrow just needs to be after May 1, if we ignore the end date.
The second part was the requirement for getting a reservation for the credit (and the bill says a reservation is not required to obtain the credit), which is stricter about the date of the purchase contract.
Sophie is also right that FTB gets to interpret the law. Now, FTB can interpret the law wrongly, in which case you'd get a lot of upset home buyers and perhaps a few lawsuits. Or, the assembly can pass a fix-it to change the law before May 1 rolls around, in which case you'd get a lot of the former, but less chance of lawsuits. That's a whole month!
Bottomline, there still needs to be explicit and precise communication on my question#1 in my original/initial query.
Any other perspectives? Anyone?
Here it defines purchase as the date of close of escrow. However, on item (c) (1) (A) of the bill when it talks about the reservation of the credit prior to close of escrow, it specifies that the tax payer and seller need to submit a certification that "they have entered into an enforcable contract on or after May 1, 2010."
I went on to check tax franchise board's website to see how they interpret it. They will publish details on March 30: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml
So go back to check tax franchise board on March 30. Tax Franchise Board is the one who execute it so how they read this bill and how they decide to implement it are the key.
I will write in more details about it on my blog at SiliconValleyHousingPost.com after read through the details published by tax franchise board on March 30.
Sophie Shen, Realtor/CFA
Read my housing blog at SiliconValleyHousingPost.com
.... Gov. Schwarzenegger signed Assembly Bill 183, the Homebuyer Tax Credit legislation, into law. ..........
AB 183 will provide $200 million for home buyer tax credits, allocating $100 million for qualified first-time home buyers of existing homes and $100 million for purchasers of new, or previously unoccupied, homes. The eligible taxpayer who purchases a qualified personal residence on and after May 1, 2010, and on or before Dec. 31, 2010, or who purchases a qualified principal residence on and after Dec. 31, 2010, and before Aug. 1, 2011, pursuant to an enforceable contract executed on or before Dec. 31, 2010, will be able to take the allowed tax credit. The credit is equal to the lesser of 5 percent of the purchase price or $10,000, in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home for at least two years or forfeit the credit (i.e., repay it to the state).
The positive impact of the federal home buyer tax credit is clear. Nearly 40 percent of first-time home buyers said they would not have purchased a home if the federal tax credit for first-time home buyers was not offered, according to C.A.R. research conducted last year.
The stateâ€™s previous home buyer tax credit program was so successful that it ran out of tax credits by the end of June 2009, eight months before it was set to expire and just as housing markets appeared to be turning a corner. Unlike last yearâ€™s legislation, AB 183 adds a tax credit for the purchase of an existing home by a first-time home buyer.
AB 183 will significantly contribute to the effort to stimulate jobs-creation within California's housing market by helping to incentivize first-time home buyers to purchase homes that have been abandoned, foreclosed upon and returned to the lender, or have been sitting on the market for extended periods of time. It is these homes that will require substantial rehabilitation by the new owners, which will in turn generate a tremendous increase in jobs and accessory purchases connected to home improvement activities.
So, the way I am reading this (and I am neither a Lawyer or a CPA) it will apply only to contracts that are executed on or after May 1, 2010 to December 31, 2010 and the escrow must close on or before August 1, 2010. It is a $200,000,000 allocation to be split 50/50 between new or previously unoccupied personal residence purchases and preexisting home purchases. Also, the new home buyer must live in the property for 2 years as their principal residence or they would have to repay the credit.
The credit will the lessor of 5% of the total purchase price or $10,000 total and will be split between three (3) tax years.
Unless the Federal credit is extended beyond its current sunset date of April 30, 2010 (with escrow to be closed by June 1, 2010) there doesn't appear to be an opportunity for double dipping. You either get one or the other. Still, getting a potential $10,000 credit in place of an $8,000 one doesn't seem too shabby to me.
In fact, my hubby and I are looking forward to taking advantage of this newest offered credit toward the purchase of our first home together sometime later this year.
As to whether the purchase can't be from a family member, that I don't know and can't guess because I haven't been able to find any info on that. I would actually not be surprised to find out that it is allowed or disallowed. As I see it, this is a potential gift horse and you know what they say... "Don't look a gift horse in the mouth" so... I shall take it at face value until I hear otherwise.
I am actually very pleased to see that they have decided to do this as it could potentially help folks who have been sitting on the fence about their home purchase decide to jump down into the fray.
I hope I helped :-) Take care, help lots of people and have a wonderful day!
Tisza Major-Posner, Realtor, SFR*, RREOBS**, DRE#01784679, IVPG Realty (909) 837-8922
* National Association of Realtors Certified Short Sale and Foreclosure Resource Specialist
** California Association of Realtors Certified Residential REO Buyer Specialist