On Thursday, March 25, Gov. Schwarzenegger signed the 2010 Tax Credit for New Home/First-Time Buyer bill (AB183) that awards up to $200 million in state income tax credits to homebuyers starting May 1, 2010. The tax credit is worth up to $10,000, spread evenly over three years, and is available to qualified buyers who purchase a new home or to first-time buyers who buy a new or existing home.

The home must be a single-family residence, attached or detached, and be used as the buyer’s principal residence for at least two years. The tax credit is equal to 5% of the purchase price or $10,000, whichever is less. It must be claimed in equal amounts over the three years, beginning with the year of purchase. To save $10,000, a homeowner must owe at least $3,333 in state income tax in each of the three years.

For more information visit: http://www.ftb.ca.gov/individuals/New_Home_Credit.html.