The funds allocated for California’s first-time home buyer tax credit were not used up in the first few weeks of the program as some had forecast back in April, but should all be spoken for soon. When exactly will the $100 million be gone? That’s a good question. According to the Franchise Tax Board website the state had received more than 17,000 applications, representing more than $91 million of the fund, as of June 22nd. They say they’ll stop accepting applications once they get 28,000, and that even those will be subject to the availability of remaining credits.
This means frustrating uncertainty for buyers who are in escrow now, since you can’t apply for the credit until your transaction has actually closed and you won’t know for a while if you’re going to get it or not. The FTB says they’ll announce the cutoff date on their webpage at least one full day before they stop accepting first-time buyer applications, but to put it diplomatically the whole system does not seem very well designed, as evidenced by a couple of choice quotes from the tax credit webpage:
“We expect it to take 3-6 months to notify taxpayers after an application or reservation is received.”
“It can take several minutes or possibly up to an hour to connect and transmit the fax. If you receive a busy signal, try again later.”
And my favorite: “We have not processed any applications yet as our computer system is still being developed.”
So basically, at some point you’ll find out if you actually will get the credit…or not. It could take six months before you know, and good luck trying to fax in your application.