Tax Credit for New Home Purchase

Important update (07/03/09): FTB No Longer Accepting Applications

As of July 3, 2009, we are no longer accepting new home credit applications. As shown in the numbers below, we have received over $100 million in new home credit applications and more than 12,000 applications.

We planned to receive 12,000 applications since many are duplicates, revised, or invalid. This ensures we have more than enough valid applications to allocate the full $100 million. These additional applications will be subject to the availability of remaining credits.

We will continue to report certificates issued on a weekly basis until the full $100 million has been allocated. We expect to complete processing all certificates in August. We will send a notification in response to all applications received, indicating the amount of credit allocated or denied.

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.

We began accepting applications for allocation of credit by fax only on March 1, 2009. We began processing the applications on a first-come, first-served basis, on May 1, 2009. The processing delay was necessary to allow us time to develop a system to capture and verify the application information, allocate the credits, and send the credit allocation letters. We expect it will take until the end of August to process all the applications we received and mail credit allocation letters.

Tax credit amounts

California allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from us. We will review applications and allocate credit on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available. We began issuing certificates of credit allocation on May 1, 2009. Please check this page for updates on the allocated and remaining credits available.

Certificates issued for New Home Credit through 07/22/09:

As of	Total certificates issued:	Total credit allocated:	Remaining credit available:
5/13/09	331	$ 3,246,532	$ 96,753,468
5/20/09	1,023	$ 9,942,884	$ 90,057,116
5/27/09	1,749	$ 16,699,924	$ 83,300,076
6/3/09	2,502	$ 23,822,657	$ 76,177,343
6/10/09	3,219	$ 30,465,953	$ 69,534,047
6/17/09	3,943	$ 36,857,428	$ 63,142,572
6/24/09	4,808	$ 44,947,157	$ 55,052,843
7/1/09	5,503	$ 51,442,798	$ 48,557,202
7/8/09	6,243	$ 58,355,593	$ 41,644,407
7/15/09	7,125	$ 66,753,568	$ 33,246,432
7/22/09	7,567	$ 70,978,652	$ 29,021,348

The amounts below reflect applications received, which include both processed and unprocessed applications.

Applications for New Home Credit received through 07/02/09:

As of	Total Applications received:	Total Credit claimed:
3/4/09	173	$ 1,715,826
3/11/09	711	$ 6,987,515
3/18/09	1,188	$ 11,599,825
3/25/09	1,710	$ 16,647,498
4/1/09	2,624	$ 25,578,709
4/8/09	3,135	$ 30,559,124
4/15/09	3,589	$ 34,939,035
4/22/09	4,199	$ 40,879,872
4/29/09	4,880	$ 47,353,795
5/6/09	5,668	$ 54,928,875
5/13/09	6,162	$ 59,579,591
5/20/09	6,816	$ 65,749,498
5/27/09	7,517	$ 72,511,587
6/3/09	8,522	$ 82,548,424
6/10/09	9,145	$ 88,252,190
6/17/09	9,848	$ 94,735,430
6/24/09	10,633	$ 102,638,616
6/28/09	11,162
6/29/09	11,316
6/30/09	11,710
7/1/09	11,925
7/2/09	12,138

This reflects the total amount of credit reported on applications received as of the date indicated. This amount has not yet been verified and may include duplicate, incomplete, and invalid applications. This amount is provided for informational purposes and does not reflect the actual amount to be allocated. Keep in mind that all applications will be processed on a first-come, first-served basis, based on the date received by fax only.

California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.

How to apply

• We are no longer accepting applications for the New Home Credit.

• Form 3528-A, Application for New Home Credit, is no longer available on our website.

Application processing

• Fax was the only delivery method accepted as the date and time stamp on the fax determined the order in which credits are allocated.  The date and time applications are received may not be reviewed in any administrative or judicial proceeding.

• The buyer will receive notification of credit allocation from us.

• An allocation of credit will not be issued if:

• • The home has been previously occupied.

• • The application is not received within one week (seven calendar days) after the close of escrow.

• • The application is received after the total credits available ($100,000,000) have been allocated.

• FTB's determination may not be protested or appealed.

Requirements of the credit

• The home must be a "qualified principal residence" as defined under California Revenue and Taxation Code Section 17059(b)(1). The home must:

• • Be a single-family residence, whether detached or attached.

• • Never have been previously occupied.

• • Be occupied by the taxpayer for a minimum of two years.

• • Be eligible for the property tax homeowner’s exemption under California Revenue and Taxation Code Section 218.

• For over three successive taxable years, the total credit allocated among owners that occupy the home must not exceed $10,000. (Multiple qualified buyers that occupy the home will be allocated credit based on the amount paid and their percentage of ownership.)

• Any credit that reduced tax on a tax return must be repaid if the buyer does not occupy the home for at least two years immediately following the purchase date.

• FTB may request documentation to ensure buyers have complied with the requirements of the credit.

Claiming the credit

• The buyer must receive an allocation of credit from us to claim the credit. The credit allocation letter will state the amount they can claim listed by tax year.

• The buyer should refer to Publication 3528 (available by 12/2009) for instructions on claiming the credit.

• The buyer must claim the credit on an original timely filed return, including returns filed on an extension.

• Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately, in which case each spouse is entitled to one-half of the credit, even if their ownership percentages are not equal. For two or more taxpayers who are not married/RDP, the credit amount will have already been allocated to each taxpayer occupying the residence on their respective credit allocation letter.

• If the available credit exceeds the current year net tax, the unused credit may not be carried over to the following year.

• The credit is not refundable.

• Any disallowance of the credit may not be protested or appealed.

Definitions

Purchase date:

The date escrow closes.

Qualified buyer:

A taxpayer who purchases a single-family residence, whether detached or attached, that has never been occupied, that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner’s exemption under California Revenue and Taxation Code Section 218.

Qualified Principal Residence/New Home:

A qualified principal residence means a single-family residence, whether detached or attached, that has never been occupied and is purchased to be the principal residence of the taxpayer for a minimum of two years and is eligible for the property tax homeowner’s exemption.

• Types of residence: Any of the following can qualify if it is your principal residence and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.

• Owner-built property: A home constructed by an owner -taxpayer is not eligible for the New Home Credit because the home has not been “purchased.”

Contact us

Phone:

• 888.792.4900 (press 5)

• 916.845.4900 (not toll-free)

Email: wscs.gen@ftb.ca.gov
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