The federal tax credit which ended April 30th sparked a big jump in home sales as first time buyers took advantage of low prices and interest rates. The tax relief was a big factor in the decision to purchase a home for first time home buyers as 69% of those surveyed by the California Association of Realtors said the tax credit was "very important" or "most important" in their buying decision.
Where the federal tax credit ends, the state tax credit begins. On May 1st Californians may be eligible for tax credits of 5% of the purchase price of their home or $10,000 whichever is less. There are no income or purchase limits, but the tax relief will be spread out equally over a three year period. Economists predict that the 100 million dollars allocated by the state of California towards the credit won't last long.
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