Short Sale

California Governor Arnold Schwarzenegger signed AB 183 into law yesterday, March 25, 1010. This Assembly Bill will provide a tax credit of up to ,000 to Californians who are buying their first home or those purchasing a new home. AB 183 is part of the California Jobs Initiative and purports to play an important part in jump starting California’s economy.  

AB 183 allocates 0 million for first-time home buyers of existing homes and 0 million for purchasers of brand new (previously unoccupied) homes.

The tax credit is equal to the lesser of 5 percent of the purchase price or ,000, taken in equal installments over three consecutive years. Under AB 183, purchasers will be required to live in the home as their principal residence for at least two years or forfeit the credit.

In order to be eligible for the credit, the taxpayer must close escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or close escrow on a qualified principal residence on and after December 31, 2010 and before August 1, 2011, pursuant to an enforceable contract executed on or before December 31, 2010, will be able to take the allowed tax credit.

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