California lawmakers have voted to extend a $10,000 tax credit for first-time homebuyers.

The bill allocates $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 closes escrow on a qualified principal residence between May 1, 2010 and December, 31, 2010, or who closes 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. This credit is equal to the lesser of 5% of the purchase price or $10,000, 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 (i.e. repay it to the state).”

The bill received bipartisan support in the Assembly and Senate on Monday and was signed by Governor Arnold Schwarzenegger on Thursday. California had recently passed a tax break that capped the total credit available at $100 million on new homes purchased between March 1, 2009, and March 1, 2010. This bill extended that coverage to include “used” homes and also doubled the funding.
 
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