On March 25, 2010 California approved a new $10,000 First-Time Homebuyer tax credit for purchases that close escrow on or after May 1, 2010. (Cal. Rev. & Tax Code § 17059.1)

For full details on how to apply:  http://www.ftb.ca.gov/individuals/new_home_credit.shtml

Per the Franchise Tax Board:

These tax credits are limited to the lesser of 5 percent of the purchase price or $10,000 for a qualified principal residence. Taxpayers must apply the total tax credit in equal amounts over 3 successive tax years (maximum of $3,333 per year) beginning with the tax year in which the home is purchased.

$100 Million of tax credits has been allocated to First-Time Homebuyers on a First-Come, First-Served Basis.

The California Association of Realtors® predicts that it will take only 10 – 20 days to deplete the $100 million allocation for this credit.

Regardless, with lower home prices and super low interest rates there is plenty of opportunity to get into the housing market if the numbers make sense for you and you have job security.

If the allocated tax credit can be utilized, that is an added perk!