A couple months ago we discussed that the Franchise Tax Board (FTB) in California has allocated $100 million for tax credits. Buyers that purchase new homes are eligible to receive up to $10,000. Recently, the FTB has announced that the tax credits will soon be gone. The FTB has received more than 9,800 applications, claiming nearly $95 million as of June 17, and plans to accept 12,000 applications to allow for duplicates, revisions, or invalid applications.

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. To apply, an application for new home credit must be completed by the buyer and seller within one week after the close of escrow and faxed by the escrow person to the FTB at (916) 845-9754. The FTB will continue to report the certificates issued on a weekly basis until the full $100 million has been used up. FTB expects to complete processing all certificates in August. Each applicant will receive a notification indicating the amount of credit allocated or denied.