Franchise Tax Board published the details of how a buyer can get the tax credit: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml

California Realtor Association has additional info on this subject which will be helpful for buyers:

$18,000 IN COMBINED HOMEBUYER TAX CREDITS FOR A LIMITED TIME

Californians have a brief window of opportunity to receive up to $18,000 in combined federal and state homebuyer tax credits.  To take advantage of both tax credits, a first-time homebuyer must enter into a purchase contract for a principal residence before May 1, 2010, and close escrow between May 1, 2010 and June 30, 2010, inclusive.  Buyers who are not first-time homebuyers may use the same timeframes to receive up to $16,500 in combined tax credits if they are long-time residents of their existing homes as permitted under federal law, and they purchase properties that have never been previously occupied as provided under California law.

Under the federal law slated to soon expire, a first-time homebuyer may receive up to $8,000 in tax credits, and a long-time resident may receive up to $6,500, for certain purchase contracts entered into by April 30, 2010 that close escrow by June 30, 2010.  Additionally, under a newly enacted California law, a homebuyer may receive up to $10,000 in tax credits as a first-time homebuyer or buyer of a property that has never been occupied.  The new California law applies to certain purchases that close escrow on or after May 1, 2010 (see Cal. Rev. & Tax Code section 17059.1(a)(4)).  California law generally allows buyers of never-occupied properties to reserve their credits before closing escrow, but buyers seeking to combine the federal and state tax credits will not be able to satisfy the timing requirements for such reservations (see Cal. Rev. & Tax Code section 17059.1(c)(1)(A)).  Other terms and restrictions apply to both tax credits.

The Homebuyer tax credit chart published by C.A.R summarize it well.  If you want to have the chart, please email me at SophieHome@Ymail.com.

I was asked by buyers and agents after I published info on California housing tax credit. The main focus is: “Do you need to be in contract on or after May 1 to get this credit or as long as you COE on or after May 1,  you could satisfy the timing requirement.”

On section 1, item (4) of the actual pdf of the bill, it says “A qualified principal residence is purchased on the date on which escrow closes with respect to the purchase of the qualified principal residence”.

Here it defines purchase as the date of close of escrow. However, on item (c) (1) (A) of the bill when it talks about the reservation of the credit prior to close of escrow, it specifies that the tax payer and seller need to submit a certification that “they have entered into an enforcable contract on or after May 1, 2010.”

I went on to check tax franchise board’s website to see how they interpret it. They will publish details on March 30: http://www.ftb.ca.gov/individuals/New_Home_Credit.shtml

So go back to check tax franchise board on March 30. Tax Franchise Board is the one who execute it so how they read this bill and how they decide to implement it are the key.

I will write in more details about it on my blog at SiliconValleyHousingPost.com after read through the details published by tax franchise board on March 30.