Tax Credit for New Home Purchase



Information directly from the California Franchise Board

In addition to the updated items identified on this page, we have updated Form 3528-A and the instructions for line 6 and Part III. If you have already faxed a completed application, you DO NOT need to resubmit a new application. We will update this information frequently. Please check this page often.

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. We will accept applications for allocation of credit by fax only (916.845.9754), starting March 1, 2009; however, we will not send notifications of credit allocation until we have developed procedures. Once we begin processing allocation applications, credits will be allocated on a first-come, first-served basis.

We will update this page as soon as we begin mailing credit allocation letters. We plan to begin mailing credit allocation letters no later than May 1, 2009. This delay is necessary to allow us time to develop a system to capture and verify the application information, allocate the credits, and send the credit allocation letters. Please be patient with us and do not send applications more than one time. Tax credit amounts 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. Total credit allocated: $0          Remaining credit available: $100,000,000

The remaining credit amount displayed above only reflects allocations processed. This amount will be updated once we begin mailing credit allocation letters, which is expected to commence by May 1, 2009. This amount does not include applications that have been received, but not yet processed.

Applications for New Home Credit received, but not yet processed as of 3/25/09

As of Applications received: Credit claimed:
3/4/09            173     $1,715,826
3/11/09          711     $6,987,515  
3/18/09      1,188    $11,599,825
3/25/09     1,710    $16,647,498

This reflects the total amount of credit reported on applications received as of the date indicated. This amount has not yet been verified and may include duplicate, incomplete, and invalid applications. This amount is provided for informational purposes and does not reflect the actual amount to be allocated. We will update the amount received, but not yet processed, on this webpage each Friday.

As we approach the $100,000,000 limitation, we will update the reported amounts on a daily basis. Keep in mind, that all applications will be processed on a first-come, first-served basis, based on the date received by fax only.

California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.

How to apply Within one week (seven calendar days) after the close of escrow:
The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person. The buyer will complete Parts II & III of Form 3528-A.

The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer. Fax is the only delivery method that will be accepted and considered for credit allocation by FTB, as the date and time stamp on the fax will determine the order in which credits are allocated.

Fax only one completed application per residence with all qualified buyers listed. Do not include information on nonqualified buyers. An incomplete application may delay or prevent credit allocation. Do not fax the application to FTB before escrow closes. Do not fax the application to FTB more than once. We will process the applications in the order received as quickly as possible. Escrow companies should only send one application per fax transmission. The buyer keeps a copy of the completed Form 3528-A for their records. The Form 3528-A is now available online as a fillable form. Simply fill in all required information, print the form, and sign.

If you fill out the form by hand, please print numbers as clearly and neatly as possible using CAPITAL LETTERS and staying between the lines. The faxes can be very hard to read.

Application processing
The buyer will receive notification of credit allocation from us. An allocation of credit will not be issued if:
The home has been previously occupied.
The application is not received within one week after the close of escrow.
The application is received after the total credits available ($100,000,000) have been allocated.

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.”

Contact us Phone: 888.792.4900 (press 5) 916.845.4900 (not toll-free)

Email:   This is not a secure email address.

Please do not send confidential information.


Althea Garner
Executive Real Estate
House Of Homes Online
DRE 01516817
(714) 264-3458

Search over 50,000 listings at my web site:

Women’s Council of REALTORS(R):
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Vice Chair – 2009


Ooops…. she did it again!

I guess I am too used to working foreclosures and in general, real estate, so I really don’t want to discuss HOW I got the FakeAV virus – just how I got RID of it!

Firstly,  how did I know that my computer had a virus in the first place?  Honestly,  as anal as I am, I am paranoid about maintaining a clean computer, as much for my protection as for those with whom I am in communication (for which reason,  no-one has heard from me for three days!).  I was doing an Internet search for electricians, but what came up, was a list of dating sites.  HUH?  I am married and wouldn’t need a dating site!  I checked my search criteria, just in case I typed it incorrectly, but no….  I was correct!  Second guessing myself (as we do) I typed it in again and guess what?  I got dating sites again!

My next search (logically) was for new viruses,  as I have virus protection and assumed that the virus I might have was something not detected by my current program.  This time I got vacation resort sites!

Huh?  What the ———?  Just the mere typing of the word virus, took me to all and sundry sites EXCEPT for those that might give me information.  I launched my McAffee virus protection (and eradication) software only to find that ‘Scan’ etc, was grayed out!  Well naturally,  the virus didn’t want to be removed and therefore had disabled my protection software! Clever little virus, wasn’t it?

Now,  my biggest fear was that this type of virus (a Trojan or worm) is used by those criminals who reduce your computer to ‘zombie’ status, and use it as a mail server to launch thousands of e-mails!  Consider those ads that offer you X-thousands of mailouts for $Y.00?  Yup,  they’re coming from YOUR computer,  so when it is time to black list for spam,  it’s YOU they black list! And you don’t even know that your computer is being used!

This was Friday afternoon and thus started a weekend of virus hide and seek.  My first line of attack was to seek out all the files created in the last 24 hours (I would have expanded to the last week etc, had this not been successful) and sure enough,  I found a Windows file that was downloaded outside the update time frame.  Upon closer scrutiny, I noticed that this appeared to be a Microsoft file, BUT, checking the original name (through Properties) a non-Microsoft name was revealed with no manufacturer.

“Ah-HA!  Got you,  you little sucker”, I thought, and promptly deleted it!  There followed a list of 103 files generated in an around the time that I deleted the offending file!  What now?  It would appear as though deleting the master file, caused the virus to ‘spawn’ hundreds of aliases in different folders.  “Aw…..  I don’t have time for this,  I thought ~  I’ll call a geek!”

Now understand that my Internet Explorer was giving me everything EXCEPT what I was searching for, so I fired up my laptop, found Best Buy and called them.  HOW MUCH?  $399 per incident to remove a virus (any virus) – $299 if I took my tower in!  You MUST be JOKING!  I remember telling the Best Buy person: “You can’t see me, but I don’t LOOK stupid, either!” Dang…  I’m in the wrong business!

Doing a little research on the Internet via my laptop,  I found the file extension of the spawned files (all three of them) and started searching and deleting the files, one by one. This added a new challenge – as I scrolled down the list of files,  the window would freeze, halting my system, but with each file that I deleted, I noticed that a file was being added to my Trash Can, but that nothing was visible when I opened the Trash Can window!  Sneaky – very sneaky!  Still,  I dutifully instructed my computer to empty the Trash Can and sure enough,  the file had gone from the list.

103 files,  103 deletions,  103 Trash Can empties. 103 painful file searches and 103 reboots and finally,  my McAffee would work to the point where I could scan for malware!  By the time I was done,  it was Monday morning at 11am,  but I was virus free, adware free and spyware free!  My system was so squeaky clean that it just plain glowed!

Just a word of advice:  Download McAffee Stinger (free from the McAffee web site) which will scan for 538 of the most virulent viruses, Trojans and variants.  Follow this up with Windows Defender (free from which will catch any spyware or adware that might still exist.

Oh…..  I must mention that when I was ready to tear my hair out this morning,  I called my son, who is possibly THE most knowledgeable IT person I have ever known.  It was he who pointed me in the direction of Stinger and Defender, but by that time, the virus had already been arrested and removed.  Still,  in all my ‘hacking’  I had made quite a mess of my Internet settings and really needed someone ‘in the know’ to check on what I had done!

Thanks, son…..  I guess I really am in diaper credit now!  (For those of you who might not understand the currency of diapers:  a mother leverages the years of diaper changes – “I changed your diapers….  I washed your diapers” etc.  Well,  by now,  my diaper bank account is sorely in overdraft!  LOL) 

As sons go,  I don’t know how he got so smart, while I am so dumb for having got that virus, when I really knew better!


Althea Garner
Executive Real Estate
House Of Homes Online
(714) 264-3458

Search over 50,000 listings at my web site:

Women’s Council of REALTORS(R):
Treasurer – 2008 (Coastal-West)
Webmaster – 2009 (Long Beach)
Editor – 2009 (Long Beach)
Education Committee – 2009 (California State)

Orange County Association of REALTORS(R):
Education Chair – 2009