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.

California allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from us. Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available. Please check this page for updates on the allocated and remaining credits available.

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.

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.”