House votes to expand homebuyer tax credit
By STEPHEN OHLEMACHER (AP)
Nov 5, 2009
The House voted 403-12 to extend and expand the tax credit to include many buyers who already own homes.
The Senate approved the measure Wednesday, November 4, and the White House said President Barack Obama would sign it today.
“Buyers who have owned their current homes at least five years would be eligible for tax credits of up to $6,500. First-time homebuyers — or anyone who hasn't owned a home in the last three years — would still get up to $8,000. To qualify, buyers in both groups have to sign a purchase agreement by April 30, 2010, and close by June 30. The credit is available for the purchase of principal homes costing $800,000 or less, meaning vacation homes are ineligible. The credit would be phased out for individuals with annual incomes above $125,000 and for joint filers with incomes above $225,000.”
Property Tax Relief
California’s Proposition 60 and 90
Two California measures allow home buyers age 55 or older to transfer the tax base from the home they are selling to a new principal residence. You may qualify for this tax relief, saving you a considerable amount on property taxes.
Proposition 60, under certain requirements, allows for a homeowner 55 years of age or older at the time of sale of his principal residence, to transfer the tax base rate within the same county provided the new residence is of equal or lesser value than the home being replaced.
Proposition 90, takes this one step further, allowing a 55+ homeowner to transfer his tax base from one county to another within participating counties. San Diego County does allow transfer of a tax base under this provision.
For example, if you are moving from a $600,000 Los Angeles home with an assessed value of $90,000, you can purchase a new property in San Diego County at $500,000 and keep that same $90,000 property tax base.
If you purchase your new home first and then sell your old home, you must go down in price. If you sell your old home first and then purchase a new home, during the first year after the sale, you can go up 5% in the purchase price of your new home. If your new purchase is more than one year (but less than two years) from the sale of your previous home, you can go up 10% in price. You also have the option of paying the commission outside of escrow to bring down the sale price.
Without exception, the new property must be purchased within two years from the sales of the previous property.
How It Works
If you qualify, you must file an application within the time period prescribed. The County Assessor determines if your transaction qualifies. This is a one-time only benefit and if there is more than one owner of the original property, only one of them can take advantage of this benefit.
For more information on this potentially substantial tax savings, visit the San Diego County Assessor website.
The above is provided for informational purposes only and is not meant to constitute legal advice. It is always best to consult with your accountant, tax advisor and other professionals regarding your individual situation. I am not able, nor qualified, to answer specific questions regarding these propositions.
